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Macroeconomic Uncertainty and Risk: Collective Optimism of Small-Business Owners

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  • Pankaj C. Patel
  • Mike Tsionas

Abstract

How small-business owners assess uncertainty and risk in the macroeconomic environment to report optimism toward their business activity is an important research question for policymakers and academics alike. Drawing on a monthly optimism index and a variety of uncertainty and volatility (risk) trackers from January 1986 to June 2017, in line with the expectation that business owners dislike uncertainty in economic policy, economic policy uncertainty may lower optimism. Business investment and sentiment volatility, however, contributed positively to optimism. The findings provide preliminary implications for policymakers in targeting indicators salient to the optimism index of small-business owners.

Suggested Citation

  • Pankaj C. Patel & Mike Tsionas, 2022. "Macroeconomic Uncertainty and Risk: Collective Optimism of Small-Business Owners," Entrepreneurship Theory and Practice, , vol. 46(5), pages 1402-1422, September.
    • Handle: RePEc:sae:entthe:v:46:y:2022:i:5:p:1402-1422
    DOI: 10.1177/1042258720985475
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    1. Pankaj C. Patel, 2025. "Bonding the Gap: Surety Bond Guarantee, Defaults, and Small Businesses," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(3), pages 1437-1458, April.

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