How productive is optimism? the Impact of ambiguity on the "big push"
AbstractThe 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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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 1 ()
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Ambiguity; Strategic Complementary; Coordination Games; Optimism; "Big Push".;
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
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