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How Optimism Strengthens Economies

Even if our pessimism were grounded in reality, studies suggest it would be better for the economy if we pretended to be optimistic
How Optimism Strengthens Economies
Photo illustrator: 731. Photographer: PM Images/Getty Images (businessman)

As Americans size up a new year, optimism appears to be in short supply. Despite strong economic growth and a falling unemployment rate, gloom about the country’s long-term prospects remains pervasive. Hopes for the next generation are particularly fragile. A poll by Hart Research Associates and Public Opinion Strategies suggests that 76 percent of Americans aren’t confident that life for their children will be better than it’s been for themselves. That’s an increase from 42 percent in December 2001. Europeans are almost as pessimistic. A 2014 Pew Research poll of global attitudes found that in 10 North American and European countries, 65 percent of respondents said today’s children would be worse off financially than their parents.

With memories of the Great Recession still fresh, such pessimism is somewhat understandable. But it’s also largely ill-founded—and according to recent economic research, the attitude can be self-fulfilling. Even if our pessimism were grounded in reality, we would have a better chance of improving our economic fortunes if we pretended to be optimistic. For the sake of our children, we need to snap out of our funk about their futures.