Risks, Journal Year: 2025, Volume and Issue: 13(5), P. 83 - 83
Published: April 26, 2025
This paper examines the macroeconomic implications of unrealistic optimism, a psychological bias that has been largely overlooked in economic models. While traditional models often link optimism to speculative bubbles and excessive risk taking, this study challenges view by demonstrating may rather accelerate recessions. Specifically, we develop model which consumers, under influence believe negative aggregate shocks will affect others but not themselves. misjudgment leads premature fall output prices, reducing production triggering Additionally, show government intervention, when optimally timed, can mitigate adverse effects offering important policy for stabilizing economies. By highlighting possibility optimism-induced downturns, provides new insights into behavioral macroeconomics offers novel perspective on design.
Language: Английский