How productive is optimism? the Impact of ambiguity on the "big push"

The paper finds that sufficient ambiguity leads to the uniqueness of equilibrium in macroeconomic coordination games. The results have a Keynesian flavour: sufficient optimism gives rise to a Pareto-optimal equilibrium; and sufficient pessimism results in a Pareto-inferior equilibrium. This analysis is applied to a "Big Push" model from the economic growth literature.

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Year of publication:	2010
Authors:	Kelsey, David ; Pang, Wei
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 30.2010, 1, p. 855-865
Publisher:	AccessEcon
Subject:	Ambiguity \| Strategic Complementary \| Coordination Games \| Optimism \| "Big Push"

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	D8 - Information and Uncertainty ; H3 - Fiscal Policies and Behavior of Economic Agents
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008540646