AV Essential Reads: Decoding the Economy’s Emotional Pulse
Our newest ”Essential Reads“ selection is Kyla Scanlon’s book on the vibe economy
With her writings and a viral online presence, Gen X’s favorite economist reveals how subjective perceptions influence real-world outcomes just as much as objective data.
Described by Fast Company as “the coolest econ nerd on the internet,” Kyla Scanlon has captured widespread attention with her dynamic presence on platforms like YouTube and TikTok, where her engaging economic content reaches over 42,000 and nearly 180,000 followers, respectively. Beyond her influence on social media, Scanlon contributes to major outlets like Bloomberg and curates a well-received newsletter, all in pursuit of her mission: to make economics understandable and entertaining for a younger audience.
Her insights, such as the concept of ‘vibecession’ — a term Scanlon coined to describe the gap between the public’s negative economic sentiment and the more optimistic official indicators like GDP growth — quickly gained traction, appearing in major media and even making its way into Dictionary.com.
In her first book, In This Economy?: How Money & Markets Really Work (Penguin Random House, 2024), Scanlon has created an essential, approachable guide to understanding the human side of economics. With her distinctive blend of creative analogies, clever illustrations, clear language, and literary quotes, she tackles topics ranging from classical economics to housing, stocks, bonds, cryptocurrencies, and monetary policy.
Our vibes — our collective feelings about the economy — not only affect how much we borrow, spend, save, and earn but also move the needle on food prices, gas prices, shelter costs, wages, and more.
A Bite of Uncertainty Cake
In This Economy frames many of these topics within Scanlon’s unique “vibe economy” concept. Highlighting the significant “expectations vs. reality gap,” the book underscores how real-world outcomes are shaped by objective data and subjective perceptions, or “vibes” essential for understanding current and future economic scenarios.
A key metaphor Scanlon uses to explore these topics is “Uncertainty Cake.” The cake is divided into three layers:
- Expectations: How individuals and markets expect economic situations to unfold.
- Theory: This layer often involves scientific-sounding theories that attempt to bridge the gap between expectations and reality.
- Reality: Reflects the actual state of economic affairs, which may differ from both expectations and theoretical predictions.
Watch Kyla Scanlon’s interview with Scott Galloway on his popular “Prof G” podcast. Link here >>
‘People Peopling Around’
Throughout her book, Scanlon encourages readers to be mindful of the discrepancies between their financial expectations and reality, promoting a more adaptable and resilient approach to personal finance. She highlights the importance of preparing for uncertainty by maintaining a diversified portfolio, building emergency savings, and being open to adjusting financial plans as circumstances change.
Scanlon’s book serves a reminder that economic activities are fundamentally about human interactions and transactions. “Most of it is intuitive, even if it doesn’t seem so. … The economy is really a bunch of people peopling around.”
With that people-first approach, In This Economy? makes high-minded concepts and complex statistics accessible and translatable to everyday concerns like mortgage rates, job security, and personal finances. As Scanlon puts it, “When we’re worried about the economy, we’re really worried about our own money.”
Takeaways for Investors
Don’t stress about short-term economic swings or act impulsively. Diversification is fortification against a downturn in specific segments of the economy. Never invest more than you can afford to lose. Thoughtfully plan but adapt as needed. That’s common sense advice that works for any generation.
KYLA SCANLON is an economic commentator and Bloomberg contributor specializing in human-centric analysis that demystifies the complex. She started her career as a car salesperson before becoming an associate at Capital Group, conducting macroeconomic analysis and modeling investment strategies.
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