Can a good story change economic reality?

<p dir="ltr">Economic decisions aren’t only driven by hard data. A compelling story can change economic behavior and outcomes. In today’s episode, we explore real-world examples of “narrative economics” like how the Suez Canal ended up getting built. And we ask: why do narratives sometimes matter more than truth or data? <p dir="ltr"><strong>Related episodes: <br /></strong><a href="https://www.npr.org/2025/11/06/nx-s1-5600041/this-indicator-hasnt-flashed-this-red-since-the-dot-com-bubble" target="_blank">This indicator hasn’t flashed this red since the dot-com bubble</a> <br /><a href="https://www.npr.org/2025/12/19/nx-s1-5648809/tariffs-consumer-sentiment-cape-ratio-pick-the-indicator-of-the-year" target="_blank">Tariffs. Consumer sentiment. Cape Ratio. Pick The Indicator of The Year!</a> <br /><a href="https://www.npr.org/2023/09/19/1197954171/the-indicator-from-planet-money-09-19-2023" target="_blank">The Beigie Awards: Manufacturing takes center stage</a> <p dir="ltr">For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at <a href="http://plus.npr.org/" target="_blank">plus.npr.org</a>. Fact-checking by <a href="https://www.npr.org/people/1268825622/sierra-juarez" target="_blank">Sierra Juarez</a>. Music by <a href="https://dropelectric.bandcamp.com/" target="_blank">Drop Electric</a>. Find us: <a href="https://www.tiktok.com/@planetmoney" target="_blank">TikTok</a>, <a href="https://www.instagram.com/planetmoney/" target="_blank">Instagram</a>, <a href="https://www.facebook.com/planetmoney" target="_blank">Facebook</a>, <a href="https://www.npr.org/newsletter/money" target="_blank">Newsletter</a>.  <br /><br /><br />See <a href="https://pcm.adswizz.com">pcm.adswizz.com</a> for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.<br /><br /><a href="https://www.npr.org/about-npr/179878450/privacy-policy">NPR Privacy Policy</a>