We explore the business cycle implications of expectation shocks and of two well-known psychological biases, optimism … and overconfidence. The expectations of optimistic agents are biased toward good outcomes, while overconfident agents … overestimate the precision of the signals that they receive. Both expectation shocks and overconfidence can increase business …

framework or budgetary transparency, reduces the degree of optimism at the first-release stage, thereby making first …

This Paper looks at the effects of entrepreneurial optimism on financial contracting and corporate performance …. Optimism may increase effort, but is bad for adaptation decisions as the entrepreneur underweights negative information. The … optimists tend to be grow less, die sooner and be less profitable, which we view as a confirmation that our measure of optimism …

Are optimism shocks an important source of business cycle fluctuations? Are deficit-financed tax cuts better than … additional restrictions, it is hard to support the claim that either optimism shocks are an important source of business cycle …