Story Hour

Bloomberg pointed out a study done by The Carlyle Group on the effects that the number of certain headlines had on private business owners. The results of said study was that, not surprisingly, business owners were swayed by what they were currently hearing and reading which led some to the thinking that the feedback loop in the current state of affairs might be stronger than one thinks. While this is no real surprise, some have taken this a step further in suggesting that Central Banks are doing a poor job of driving the narrative and should spend more time “storytelling” in an effort to better craft peoples expectations and henceforth actions. So, in a world of negative rates, Central Banks worldwide are suddenly empowered with one more tool in their monetary tool kit: Storytelling. In fact, comments from the Head of Swedens Riksbank speak to this new monetary weapon when he stated “I’m a shaman,” said Stefan Ingves, governor of Sweden’sRiksbank. “I’m a weatherman, I’m a showman, and I’m an
economist.’’ But above all: “I’m expected to be, and I am, a
storyteller. I tell stories about the future.” The stories that Central Bankers could be telling their constituencies now revolve around the ineffectiveness of interest rates on real economic activity, particularly at negative rates of interest.