It’s the time of the year for producing lists: the best films of 2015, the best books, etc. Radio stations invite their audience to select their preferred songs. This ends up in a top 100 for the year or an ‘all-time top 1000’. The latter is a source of nostalgia (“what was I doing 40 years ago when this song was a hit?”) and inspiration: for an economist it is tempting indeed to look for links between modern music and economic topics (looking for links with film titles is another favourite pass-time of economists). The rationale is that economics is either hard to explain or boring, or both, so referring to songs can make it easier to understand or at least is more fun.

There is an issue of calibration however. At one extreme, you can just use the title but the lyrics have no relevance whatsoever for the economic topic you want to illustrate. At the other extreme, the song is about an economic topic, think of Bruce Springsteen’s Wrecking Ball album. Readers of about my age may remember 10CC’s The Wall Street Shuffle. I was in secondary school when it was released in 1974 and didn’t realise when listening to “you need a yen to make a mark” that the song was about floating exchange rates in the post-Bretton Woods era nor did I imagine I would spend my professional career analysing these topics. Between these extremes you have songs where the title fits the point you want to make and where the story in the song can be used as a metaphor. Here are my top picks (from the titles the reader will see I’m less tuned in to recent musical trends).

In third place I put Paradise by the Dashboard Light of Meatloaf. Released in 1977, the song is about a boy and a girl sitting in a car but the girl wants a commitment from the boy for the future before, to quote the lyrics, “going any further”. The boyfriend commits (that seemed optimal to him at that time) but at the end of the song he regrets his commitment. For an economist it’s the perfect illustration of the issue of the temporal inconsistency of optimal plans (the economists Kydland and Prescott published their famous article on this topic in 1977 and they also received the Nobel prize for it in 2004). The metaphor can be used to illustrate moral hazard and how countries deal with rescue packages (which is why they come in tranches with conditions attached at each stage).

In second place I have Billy Joel’s We Didn’t Start the Fire. Released in 1989 the song is about headline events since Billy Joel was born… Every time I hear it, I have to think about the blame game between developed and developing economies in case of spillover effects of domestic economic policy measures. When the Fed embarked on quantitative easing, this triggered complaints from developing economies about a currency war, because they suffered from an appreciation of their currencies against the dollar as they were inundated with foreign liquidity. They “didn’t start the fire”…

The top spot is for Elvis Presley’s Suspicious Minds. The text can be used as a metaphor for the relationship between financial markets and central banks. Between the two there is also a great deal of suspicion. What better way to illustrate the concern about Fed tightening than by starting the story with “We’re caught in a trap…”. ‘We’ can be the investors, who have been in risk-seeking mode for many years and are now worried about the monetary policy outlook, but also the Fed, faced with a need to hike but with a concern about how markets will react.