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

David Kelsey and Wei Pang ()
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Wei Pang: Kingston University

Economics Bulletin, 2010, vol. 30, issue 1, 855-865

Abstract: 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.

Keywords: Ambiguity; Strategic Complementary; Coordination Games; Optimism; "Big Push". (search for similar items in EconPapers)
JEL-codes: D8 H3 (search for similar items in EconPapers)
Date: 2010-03-25
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