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How Productive is Optimism? A Simple Keynes-type "Big Push" Model

Author

Listed:
  • Kelsey, David

    (University of Exeter)

  • Pang, Wei

    (Kingston University London)

Abstract

The paper examines the impacts of ambiguity and ambiguity attitudes on macro-economic "Big Push" model. By formally modelling ambiguity, optimism and pessimism in economic industrialization, we show the results with Keynesian flavour: sufficient optimism can create the "Big Push" to help the economy achieve Pareto-optimal equilibrium and sufficient pessimism cause economies to become "stuck" in an inefficient state.

Suggested Citation

  • Kelsey, David & Pang, Wei, 2009. "How Productive is Optimism? A Simple Keynes-type "Big Push" Model," Economics Discussion Papers 2009-2, School of Economics, Kingston University London.
    • Handle: RePEc:ris:kngedp:2009_002
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Ambiguity; Pessimism; Optimism; Big push;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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