Home > Matthew Yglesias > Feelings vs Expectations

Feelings vs Expectations

I’ve spent a good amount of time distinguishing between different types of uncertainty and how they affect or don’t affect our economy. (e.g. here, here, and here) On a simlar topic Matthew Yglesias gives us the quote of the day discussing businessmen’s feelings versus rational expectations for business:

The notion that economic growth depends crucially on the subjective feelings of the business executive class is one of the most pernicious ideas to take hold over the past 12 months. One should distinguish this hypothesis from the accurate point that rational expectations matter in the economy. Expectations do matter. But this is often confused with the idea that if the waiters at Davos are rude this year the economy will go into a recession, but if Obama gives a CEO a really sensual back rub growth will return.

  1. zach
    January 25, 2011 at 1:52 am

    post-racial america, y’all.

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