Investor Beliefs and Volatile Stock Markets

'Mindles Dreck' discusses one cause for volatile prices in the stock market. Small changes in beliefs about future earnings can lead to large swings in prices. He cites this paper by Mordecai Kurz.

if agents disagree then the state of belief of each agent, represented by his conditional probability, must fluctuate over time. Hence the distribution of the individual states of belief in the market is the root cause of all phenomena of market volatility.

Bill Sterling of Trilogy Advisors mentioned Kurz's work to me after I wrote Future Uncertainty and Present Indeterminacy.

Discussion Question. Can you give an example of an optimistic scenario and a pessimistic scenario for the U.S. economy for the next five years?