Westerhoff, Frank H.Frank H.Westerhoff0000-0003-1666-41032025-05-082025-05-082025https://fis.uni-bamberg.de/handle/uniba/106915We propose a simple agent-based macroeconomic model in which frms hold heterogeneous sales expectations. A frm may either optimistically expect an increase in its sales or pessimistically expect the opposite. Whether a given frm is optimistic or pessimistic depends on macroeconomic conditions and the average mood prevailing within its social/local neighborhood. For instance, the probability of a frm taking an optimistic view increases not only during a boom but also with the number of its optimistic neighbors. We show that such an economy may give rise to co-evolving dynamics between the business cycle and the frms’ average sentiment.eng-330articleurn:nbn:de:bvb:473-irb-1069153