From News to Narrative: How journalists explain Inflation

The term ‘narrative’ comes with a negative connotation. It often subtly implies that manipulation, deception, or outright lies are involved. Those who spread narratives do so with a specific aim in mind: politicians want to broaden their follower base, advertisers wish to sell their products, top managers aim at attracting investors, and conspiracy theorists strive to forge communities of believers in the echo chambers of social media. The concept of narrative thus appears to be the opposite of information. The latter is supposedly objective, while the former is misleading.

This is how a recent contribution by Prof Henrik Müller begins. “Journalists as suppliers of narratives” is part of a special issue on economic narratives published by Munich-based ifo institute. The researchers invited a number of authors from the field of economics to provide their take on economic narratives. Prof Müller’s perspective differs a bit from the rest as he stresses that information, the stuff that economists are mostly interested in, is different from news. In the real world, most people are confronted with the latter. News media work under distinct constraints and incentives. They dig up information and transform it to create marketable products that come in the form of websites, television and radio programs, newspapers, or podcasts. What’s more, journalists need to get a grip on complex issues – and then translate their own newly acquired knowledge into stories that recipients are able to understand and actually willing to read.

Precisely because they need to reduce complexity, add meaning and arouse the audience’s interest, journalists produce media narratives. So, there’s some distortion at play. However, journalists generally do not invent narratives themselves, but are confronted with these interpretative patterns while doing research. Their job is to align narratives with measurable facts. Stories that do not fit the objective truth need to be sorted out.

Prof. Müller provides an example of new inflation readings being published. If inflation is on the rise, it’s a bigger story than stagnant or falling price levels – the well-known news value of negativity. High and rising inflation rates typically rank high on the media agenda, as was the case from autumn 2021 onward, when price increases picked up noticeably due to pandemic-related bottlenecks. However, simply reporting new figures does not constitute a narrative. They need to name some causal relationships. What’s the nature of the problem? What’s its cause? And who is responsible? This type of reasoning is different from the world view of (academic) economists.