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If everyone believes a recession is coming, they stop spending, causing a recession. On the flipside, the economy can be stimulated merely by sentiment; if eve
by Mikeb85 7y ago
If everyone believes a recession is coming, they stop spending, causing a recession.
On the flipside, the economy can be stimulated merely by sentiment; if everything thinks things will get better, they invest and spend.
The concept is similar to the 'animal spirits' that Keynes spoke of.