May 25, 2011 Economic recessions are weaker, expansions are
stronger, and economic recovery is faster in U.S. states where
people are more optimistic says a new study from the University
of Miami School of Business Administration. Further, the effects
are stronger in states where people are older, less educated and
less socially connected. "Previous studies have shown that
economic conditions affect mood -- people would expect this,
it's more obvious," said Alok Kumar, the Gabelli Asset
Management Professor of Finance at the University of Miami
School of Business and one of the study's researchers. "Our
study is unique in that it shows, for the first time, that mood
and optimism can directly affect overall economic activity." In
order to determine the link between mood and economic
conditions, Kumar, along with Vidhi Chhaochharia and George
Korniotis, assistant professors of finance, used several factors
to measure mood, optimism and pessimism not influenced by the
economic environment. The factors are: - Wea