What happens when inflation, central banking, and fiscal policy move from abstract theory into lived reality? How do economic narratives influence public trust in institutions? And what role should education play in helping citizens understand the forces shaping their financial futures?

Carola Binder is an economist and Associate Professor of Civic Leadership and Economics at the University of Texas at Austin. Her research focuses on monetary policy, inflation expectations, and how households understand and respond to economic change. She combines rigorous economic analysis with a deep interest in civic education and democratic engagement.

In this episode, we explore how ordinary people interpret economic signals such as inflation and interest rates, and why public expectations matter so deeply for policy outcomes. Carola explains how central banks rely not only on technical tools but also on credibility and communication. We discuss how narratives about the economy shape behavior, influence political discourse, and affect the legitimacy of institutions.

Our conversation also turns to the educational implications of economic literacy. If citizens are to meaningfully engage with debates about inflation, inequality, and fiscal policy, they need more than slogans or partisan framing. They need conceptual tools to understand tradeoffs, uncertainty, and institutional constraints. This episode highlights the importance of economic education not as vocational training, but as preparation for democratic participation in a complex financial world.