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

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

No 2009-2, Economics Discussion Papers from School of Economics, 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.

Keywords: Ambiguity; Pessimism; Optimism; Big push (search for similar items in EconPapers)
JEL-codes: D81 E32 H32 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-10-22
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kngedp:2009_002

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