Narratives and Economic Policy: Theoretical Explorations and the Brazilian Case

Abstract

Increasingly, economists study narratives and their causal impact on economic processes. This paper proposes a new theoretical framework of narrative analysis that is based on the philosophy of language, especially speech act theory, motivated by the observation that the economic approaches often only focus on the representational function of narratives, and therefore tend to emphasize negative consequences of biased, distorted and simplified representation. In contrast, we define narratives as a medium of distributed cognition and mediators of collective agency in networks of agents operating in an uncertain and complex world that is materially constituted by their own actions, i.e. the economy. After presenting the theory, we introduce a case study on recent developments in Brazil for illustrative purposes, focusing on the role of specific audiences and a specific narrative genre, the ‘austerity genre’.

Keywords: narrative analysis; speech act theory; audiences; performativity; Brazil; new economic matrix; austerity; financial sector

JEL Classification: B41; B52; D80; E71