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| David Kelsey and Wei Pang |
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| ''How productive is optimism? the Impact of ambiguity on the "big push"'' |
| ( 2010, Vol. 30 No.1 ) |
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| The 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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| Keywords: Ambiguity, Strategic Complementary, Coordination Games, Optimism, "Big Push". |
JEL: D8 - Information, Knowledge, and Uncertainty: General
H3 - Fiscal Policies and Behavior of Economic Agents: General |
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| Manuscript Received : Feb 05 2010 | | Manuscript Accepted : Mar 25 2010 |
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