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Another violent drop in share prices could have disproportionate effects on confidence and hence demand.
Different kinds of stimulus have different effects on confidence, depending on how they are viewed and interpreted by the public.
"Even the announcement of more rational and moderate policies is likely to start having positive effects on confidence and is likely to improve the economic climate," said Pesaran.
Monday's figures from Markit prompted economists to say the destabilising effects on confidence of the debt crisis had reached danger point.
"Developments in Europe can have big effects on the United States economy, big effects on confidence, big effects on financial markets," he said.
"My judgment, and Tim's judgment, was that given all the equities involved, and given the potentially traumatic effects on confidence, that it was much better to try to save Chrysler if a reasonable merger agreement could be reached," he said.
Similar(47)
Effects on self-confidence and self-esteem were not addressed in this study but could significantly affect AL resident quality of life.
Confidence improved in two of the 'Baby Check' studies 24322 (one high quality) but in another (high-quality) study, there was no effect on confidence.
Still, "there could be some immediate effect on confidence".
That didn't stop the attack having a catastrophic effect on confidence in the currency.
But the most damaging thing I think is this corrosive effect on confidence.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com