Idea: The less an intervention has been attempted, the more optimistic a plausible story may be tailored on its effects.

Abstract: In a political economy framework, we study how false narratives emerge in response to imperfections in recipients' memory. Coarse memory allows voters to retrieve marginal frequencies of past policies and outcomes, but prevents them from understanding their correlations. Politicians exploit such vagueness by designing narratives inflating the effectiveness of their preferred policies. We find that plausible narratives can be less optimistic about more implemented policies. In a probabilistic voting model we show that opposing narratives are polarized and that in the long run political cycles arise. The mechanism we propose is consistent with an analysis of U.S. congress members' rhetorical strategies.