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The Economic Consequences of Despair

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  • Rowena Pecchenino

    () (Department of Economics, Finance and Accounting, National University of Ireland, Maynooth)

Abstract

This paper examines despair from the perspectives of many disciplines to define despair and to characterize the despairing individual, his motivations, and his capacity for decision-making. Two models incorporating despair as a key element are then proposed. Using these models as a framework, the economics literature is examined to determine the extent to which economics has, at least implicitly, recognized despair, without necessarily confronting it either in theory or policy design, and argue why this failure has weakened both our theory and our policy. The paper concludes with the suggestions that economics can and, perhaps, should incorporate despair, narrowly, and economic agents’ emotional state, generally, into its theoretical and policy analyses.

Suggested Citation

  • Rowena Pecchenino, 2014. "The Economic Consequences of Despair," Economics, Finance and Accounting Department Working Paper Series n254-14.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n254-14.pdf
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    File URL: http://repec.maynoothuniversity.ie/mayecw-files/N254-14.pdf
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    References listed on IDEAS

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    1. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    2. Rowena Pecchenino, 2011. "Abandon Hope All Ye Who Enter Here?," Economics, Finance and Accounting Department Working Paper Series n217-11.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    3. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    4. Mazerolle, Maurice J. & Singh, Gangaram, 2002. "Social support and the reduction of discouragement after job displacement," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(4), pages 409-422.
    5. Andreas Knabe & Steffen Ratzel, 2011. "Quantifying the psychological costs of unemployment: the role of permanent income," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2751-2763.
    6. Patricio S. Dalton & Sayantan Ghosal & Anandi Mani, 2016. "Poverty and Aspirations Failure," Economic Journal, Royal Economic Society, vol. 126(590), pages 165-188, February.
    7. Goldsmith, Arthur H. & Veum, Jonathan R. & William Darity, Jr., 1996. "The impact of labor force history on self-esteem and its component parts, anxiety, alienation and depression," Journal of Economic Psychology, Elsevier, vol. 17(2), pages 183-220, April.
    8. Goldsmith, Arthur H. & Veum, Jonathan R. & Darity, William Jr., 1995. "Are being unemployed and being out of the labor force distinct states?: A psychological approach," Journal of Economic Psychology, Elsevier, vol. 16(2), pages 275-295, July.
    9. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    10. Louis Kaplow & Steven Shavell, 2007. "Moral Rules, the Moral Sentiments, and Behavior: Toward a Theory of an Optimal Moral System," Journal of Political Economy, University of Chicago Press, vol. 115, pages 494-514.
    11. Anne C. Gielen & Jan C. Ours, 2014. "Unhappiness and Job Finding," Economica, London School of Economics and Political Science, vol. 81(323), pages 544-565, July.
    12. Bjornstad, Roger, 2006. "Learned helplessness, discouraged workers, and multiple unemployment equilibria," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(3), pages 458-475, June.
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    More about this item

    Keywords

    Despair; existential state; suicide; long-term unemployment;

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics

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