Outline the importance of perception in Economics

The perception is a very important aspect of Economics, as it can bring significant changes both in a positive or in a negative way.
For example, if people perceive the economic state of the country as strong enough ( even though it is not really so) that may increase their confidence, they will tend to spend more, invest more, borrow more, businesses will produce more and eventually that will lead to the faster economic growth and the general economic state improvement.
That is one of the reasons for the governments to prevent their citizens from getting news and information from international sources as it is, for instance, in China.

On the other hand, an interesting example is the current financial crisis. People's perception of the economic situation was affected by media, which 'advertised' crisis wherever it was possible. Many advertisements like 'Credit Crunch? Everything is down by 20% now!' have appeared. People are afraid of losing their jobs, as 'their colleague's relative's friend was fined because of the credit crunch' and begin to panic. Some economists argue that this lack in confidence make the crisis worsen.
The proof for that is that even different policies such as VAT rate cut and interest rates cut did not really increase consumers' spending.

Another example is people's tastes and preferences. Switzerland banks are thought to be the 'safest', British higher education to be the best, Italian clothes as the most fashionable - all this things affect the world export and import, advertising etc.