Inside the Nudge Unit

businesses’ decisions are based on mental processes that are far from perfect, and in times of recession and doubt, much of policy is really about moving this sentiment. It may seem strange to think about it this way, but often the billions of pounds spent on schemes from tax breaks to quantitative easing (the printing of money) is more about sentiment than direct effect. If we think it’s getting better, or that someone has a plausible programme that might work to boost growth, then this itself can become a self-fulfilling prophecy, or at least one that will amplify the impact of the programme itself.