(SOUNDBITE OF DROP ELECTRIC’S "WAKING UP TO THE FIRE")

Are we in a recession? That is a question we've heard a lot recently on THE INDICATOR.

And in the voice in my brain.

WOODS: Yes - because the data is really confusing. The jobs market has been running really hot, but output growth is falling a little. The world looks really scary. We've even heard the word stagflation - a stagnant economy with high inflation. Is that what's happening?

MA: The last time we felt like this was, like, 1980. At the time, the Fed chair, Paul Volcker, was really unapologetic about needing to jack up the interest rates and cause short-term economic damage to fight inflation.

(SOUNDBITE OF TV SHOW, "THE MACNEIL-LEHRER REPORT")

PAUL VOLCKER: But, you know, you can't deal with that problem by simply saying we're going to let inflation go ahead. We're trying to combat the inflation.

MA: And as a result, unemployment would reach nearly 8% - more than double what we have today.

WOODS: Really tough times. And so you would think people would be sitting around listening to sad ballads to go with the sad times.

(SOUNDBITE OF QUEEN'S "CRAZY LITTLE THING CALLED LOVE")

WOODS: But that is actually not the case.

(SOUNDBITE OF SONG, "CRAZY LITTLE THING CALLED LOVE")

QUEEN: (Singing) This thing called love...

MA: Ah, yeah. In that year, 1980, Queen was No. 1 on the charts with "Crazy Little Thing Called Love." It's a snappy, infectious ditty. It's happy music, which it turns out is not unusual for a recession. A new paper in the Journal of Cultural Economics shows, when the economy is crumbling, we're actually a little more likely to want to listen to happy music.

This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.

WOODS: And I'm Darian Woods. When we heard that people would listen to happier music during a recession, we thought that this is the perfect chance to have a little fun in these uncertain times. We can revisit the pop charts to learn about recessions past and maybe - just maybe - get a clue about where we're at economically in 2022.

MA: After the break, Darian, you're going to take us on a musical and economic journey.

WOODS: Marco Palomeque is a doctoral candidate in economics at the University of Alcala in Spain. He plays guitar, bass. He sings, and he studied drums professionally.

MARCO PALOMEQUE: This is a box. We use it in flamenco music.

WOODS: Would you be able to play a couple of beats on that box?

WOODS: That is so cool.

And Marco has managed to combine his love for music and economics.

PALOMEQUE: As a musician, I always noticed that music helped people to be more happy when they are sad and all of that.

WOODS: And so Marco paired up with a co-author, Juan de Lucio, and they went out to see whether there was any link between the mood of popular music with the booms and the busts in the economy. Marco and his co-author made a dataset of all the songs in America's main singles charts, the Billboard Hot 100, every week from 1958 to 2019. Marco and his co-author used artificial intelligence software to classify whether the song was positive or negative based on its lyrics, and then they matched these songs against weekly unemployment claims.

PALOMEQUE: And I was thinking that, when the situation is bad, people will search for music that expressed their feelings. But I found the opposite.

WOODS: So Diana Ross' "Ain't No Mountain High Enough" - this was No. 1 on the singles charts in the 1970 recession. You also had "Step By Step" by New Kids on the Block. This was a single during the 1990 recession - Janet Jackson, "All For You" in 2001. And all of these singles are upbeat, positive songs. And to be clear, Marco and his co-authors only found a really small effect, but the relationship held up. It was statistically significant.

And this is similar to broader findings that, during recessions, people might buy or do more inexpensive things that give them a little bit of joy. A recent paper found evidence of more spending on lipstick during the 2008 recession. So, you know, this is a cheap way to heighten your look when money is tight, and this is known in economics as the lipstick effect.

PALOMEQUE: And in this case, music nowadays, with Spotify, is almost free. So it's a great good to consume when you have no money.

WOODS: So given Marco's finding, we have developed a one-off quiz show for Marco and INDICATOR listeners at home. You can play along. We are naming it Hits of the Dips. We're going to play clips of singles that were No. 1 on the charts at some point during a recession...

WOODS: ...And you have to guess which recession the single was from.

How are you feeling, Marco?

PALOMEQUE: It's going to be hard.

OLIVIA NEWTON-JOHN: (Singing) I want to get physical. Let's get into physical. Let me hear your body talk - your body talk.

PALOMEQUE: Maybe the oil recession - '74?

WOODS: No, this one's a little bit later. This was in 1982. This was Olivia Newton-John, "Physical." So this was the second of two recessions in the early '80s. So Paul Volcker had already sparked one downturn in 1980, but inflation wasn't going down enough, so the Fed had raised interest rates even higher to fight inflation even though many people were losing their jobs. You know, interest rates were around 20% at the time. Unemployment was high, but they were listening to Olivia Newton-John, "Physical," which - I don't know - it's quite a happy song.

WOODS: All right, next song and next recession.

(SOUNDBITE OF SONG, "CAN'T GET ENOUGH OF YOUR LOVE, BABE")

BARRY WHITE: (Singing) Look what you got me doing. Darling, I can't get enough of your love, babe. Girl, I don't know, I don't know, I don't know why...

PALOMEQUE: Hmm. I don't know - maybe '60s?

WOODS: A little bit later.

PALOMEQUE: '73, '74 - something like that?

WOODS: Correct, '74, yeah. So '73 to '75 - in the U.S., there was a big recession.

PALOMEQUE: OK - the oil crisis?

WOODS: The oil crisis, correct. Yeah.

UNIDENTIFIED PERSON: OPEC - the organization of oil-producing countries which has quadrupled the price of crude oil in two years and thrown the industrial world into grave turmoil...

WOODS: Unemployment was rising. It'd get up to 9% by 1975. And yeah, we've got Barry White crooning about love with his song, "Can't Get Enough Of Your Love, Babe."

PALOMEQUE: (Laughter) Well, we can always talk about love. I mean...

OK, let's see what you think about this one.

(SOUNDBITE OF SONG, "SINGLE LADIES (PUT A RING ON IT)")

BEYONCE: (Singing) All the single ladies. All the single ladies. All the single ladies.

PALOMEQUE: This is Beyonce, right?

PALOMEQUE: Yes. I'm going to say the Great Recession, maybe?

WOODS: You got it. Beyonce's "Single Ladies"...

WOODS: ...Seems to have been the soundtrack of the global financial crisis.

PALOMEQUE: Who would say (laughter)?

WOODS: Yeah. You know, this, at the time, was the worst recession since the Great Depression. Unemployment was shooting up fast, homes getting foreclosed everywhere and, yeah, we had this very cheery song.

PALOMEQUE: Yeah, it's curious, right?

WOODS: It's a bit weird, isn't it?

OK, so that's the past. But I want to see a diagnosis 'cause a lot of people at the moment are thinking, are we in a recession in the U.S.? And different indicators have been saying different things. And our official organization that calls recessions, the NBER, has not yet said that there is a recession. By other measures, you could say that there is - two quarters of GDP contractions. But then again, the labor market's doing really well.

So I want to play a song which was the hit of the summer. The song stayed in the No. 1 of the Billboard Hot 100. And so I'm wondering what you think about this - like, whether this kind of is the kind of song you would hear, you know, more often in a recession or more often in a boom. I'll play it for you.

(SOUNDBITE OF SONG, "AS IT WAS")

HARRY STYLES: (Singing) Not the same as it was, as it was, as it was.

WOODS: There you go - Harry Styles' "As It Was." What are your thoughts?

PALOMEQUE: Yeah, it's a pretty melancholic song, right?

PALOMEQUE: So according to this study, you are not in a recession.

WOODS: Great. I mean, not in a recession is good. Like, sad songs - potentially good news. But - I don't know - there are some parts of the song that are giving me pause, right? Like, the lyrics are pretty sad - good for the economy, potentially - but the keyboard melody is pretty bouncy. Like, it's kind of these mixed messages in the song. Like, I mean, it's a little bit like our economy today - like, good jobs market, for example, but, you know, a falling stock market.

PALOMEQUE: Yeah, it's kind of funny. Like, it seems to match pretty well with the situation.

WOODS: Yeah. There you go - Harry Styles' "As It Was" - kind of symbolic of the mixed signals we're getting in the economy at the moment.

(SOUNDBITE OF SONG, "AS IT WAS")

STYLES: (Singing) As it was.

WOODS: Marco Palomeque, so great to have you on the show. Thanks for joining THE INDICATOR.

PALOMEQUE: Thank you so much. It has been a pleasure.

WOODS: That's all, folks, for Hits of the Dips. Thank you, and goodnight.

WOODS: This show was produced by Corey Bridges, with engineering from Robert Rodriguez. It was fact-checked by Jamila Huxtable. Viet Le is our senior producer, and Kate Concannon edits the show. THE INDICATOR is a production of NPR.

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