Economic Uncertainty is a Self-Fulfilling Prophecy

Expectations matter. Nicholas Bloom, an economics professor at Stanford University who has studied how economic uncertainty affects the business cycle, said uncertainty is its own self-fulfilling prophecy. With consumers and companies retrenching amid a weak economic recovery, their worries about a double-dip recession could cause them to cut back more, triggering the very recession they feared.

Penny-Pinching Puts Economic Recovery on Thin Ice - WSJ.com (subscription required)