This article is essentially a summary and commentary on chapter 2 of In This Economy? by Kyla Scanlon. (My favourite Internet Economist :))

GDP, CPI, PCE... when we get good numbers, yet my grocery prices are up... why? These metrics are a scoreboard, going green, yet my vibes are red. This disconnect between the data on the paper, and the lived experience is the core of the "vibe economy." 

And this disconnect shapes our behaviour. This disconnect can be shown, like Kyla Scanlon (2024) explained, as a 3 ingredient cake:

1. Expectations (vibes): how we expect things to be

2. Theory: how things are supposed to be

3. Reality: how things are

This cake is the vibe of our economy.
For example:

1. Expectations (vibes): GDP is up, so we expect life to be easier

2. Theory: Economists expect no recession

3. Reality: sky-high rent & grocery prices
   

So, these 3 ingredients can be misaligned, and it is always seems to be happening.. thus, uncertainty is created and we act on this behaviour.

*Theory doesn’t only influence expectations (which can be irrational) but also the media!
And “economic theory is measurable, but on the basis of loose facts.” (Scanlon 2024)

Money is expectations made tradeable, theory is what the Economists say should happen, and reality, is well.. slow and messy (+a lot more). 

There is nothing new to this idea of vibes. John Maynard Keynes coined the term animal spirits which “highlights how emotions like consumer confidence and fear drive market behaviours and investor actions, affecting economic growth and market stability.” (Tardi, 2025)

As Kyla mentioned, The Economist publishes their forecast for the year ahead:

Its year-ahead preview published in January 2020/2/3 does not say a single word about major global shocks.

This isn’t an attack on The Economist. “But it highlights how massively difficult it is to wrap your head around how this behemoth called the global economy works, where it’s going, and how we can all learn to live with it." (Scanlon, 2024)

Hello! So do ya mean we don’t understand what’s happening or going to happen?

Rather than just facts and the narrative alone, “vibes have a huge amount of power over outcomes”. Investing, spending, wages, risk appetite .. it's on vibes!

So “if the vibes get worse, so will economic reality.” (Scanlon, 2024)

So to recap, vibes are the distance between theory and reality but.. GDP is the ruler we keep using!

Economies have evolved, whilst economic metrics haven’t.

Yes, real GDP per capita and productivity are measures that exist, that I guess, yes, are better.. sort of.. but let’s zoom out and remember that“growth at any cost isn’t humane.” (Scanlon, 2024)

There are a few schools of thought as mentioned in Kyla’s book that challenge the idea of GDP as the main measure of progress:

Degrowth: rather than pursuing economic growth at all costs, degrowth proposes “a reduction in the material size of the global economy” and instead “within planetary boundaries.”

Ecological Economics: “Recognises that our economy is part of a finite biosphere and needs to respect its ecological limits.”

Post growth: the proposal of new indicators of progress, “ones that better reflect societal well-being and ecological health.” (Scanlon, 2024)

Perhaps as we handle climate change, income inequality, diminishing natural resources deteriorating mental health, we should reconsider how we determine success.



References:

Degrowth. “Degrowth.” Degrowth, 2022, degrowth.info/degrowth.

“Home - the International Society for Ecological Economics.” The International Society for Ecological Economics, 18 Nov. 2024, www.isecoeco.org.

Scanlan, Kyla, and Morgan Housel. In This Economy? Penguin Books Australia, 9 July 2024.

Tardi, Carla. “Don’t Let Your Animal Spirits Influence Your Important Decisions.” Investopedia, 24 May 2021, www.investopedia.com/terms/a/animal-spirits.asp.