Placebos, Nocebos and Self-fulfilling Prophecies
Yesterday I read an article about something called the “nocebo”. A nocebo is the other side of the more well-known placebo. While the placebo refers to the dummy “medicine” that has a curative impact because the patient was told it was the real thing, the nocebo refers to the side-effects caused by the dummy “medicine” because the patient was told that the real thing sometimes caused those side-effects! Talking of such self-fulfilling prophecies, I didn’t know that the term “self-fulfilling prophecy” was coined by an economist in the 1940’s! The term was used to describe the scenario where people feel that the economic scenario is bad and hence cut down on non-essential spending which in turn leads to an actual economic slowdown. And talking of economists, I’ve always wondered why those guys never seem to be able predict an actual recession, let alone a depression. Robert Shiller feels the answer isn’t that economists are dumb. Nor is his answer that the world is too complicated to...