How Stories Drive the Stock Market

ince the stock market began falling at the beginning of this year, there seems to have been a palpable change in the stories we have been hearing. Suddenly there is more willingness to entertain the possibility of a major stock market correction, or of an economic recession. It is no surprise that this kind of talk appears after a market drop: The stock market is perhaps the most famous leading indicator of a recession, though hardly a perfect one. That status has been well known at least since the 1920s. Narrative psychology, as in......