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This paper contributes to the old theme of testing for rationality of inflation expectations in surveys, using two very different surveys in parallel. Focusing on the euro area and using two well-known surveys that include questions on inflation expectations, the Consensus Forecast survey and...
Persistent link: https://www.econbiz.de/10011604767
We develop a technique for analyzing the response dynamics of economic variables to structural shocks in linear rational expectations models. Our work differs from standard SVARs since we allow expectations of future variables to enter structural equations. We show how to estimate the...
Persistent link: https://www.econbiz.de/10013318029
, learning from the experience of the 1970s, eschewed activist policies in favor of policies that concentrated on the achievement …
Persistent link: https://www.econbiz.de/10011604383
: rational expectations and learning. We show that in this environment the ability to stabilize the real side of the economy is … private learning and misperceptions of natural rates call for greater policy inertia, a more aggressive response to inflation … economy. We show that such policies are quite robust to potential misspecification of private sector learning and the …
Persistent link: https://www.econbiz.de/10011604810
optimise under limited-information model-consistent learning, where each agent knows the parameters related to his …/her optimization problem. Under this learning approach the effect of a monetary policy shock on output and inflation is more muted but … learning version, we .find stronger expansionary effects of an increase in government expenditure during periods of downturns …
Persistent link: https://www.econbiz.de/10011605790
Macroeconomic models often invoke consumption "habits" to explain the substantial persistence of macroeconomic consumption growth. But a large literature has found no evidence of habits in the microeconomic datasets that measure the behavior of individual households. We show that the apparent...
Persistent link: https://www.econbiz.de/10012918032
realistic assumption of boundedly rational learning where agents are assumed to use only a limited set of information to form … path to the shocks to the economy when agent form expectations using our learning approach compared to expectations formed …
Persistent link: https://www.econbiz.de/10013128293
determination of aggregate variables. We study how different forms of heterogeneity in structure, forecasts and adaptive learning … rules affect the conditions for convergence of adaptive learning towards rational expectations equilibrium. Results are …
Persistent link: https://www.econbiz.de/10011604166
This survey discusses behavioral and experimental macroeconomics emphasizing a complex systems perspective. The economy consists of boundedly rational heterogeneous agents who do not fully understand their complex environment and use simple decision heuristics. Central to our survey is the...
Persistent link: https://www.econbiz.de/10012142045
convergence in their credit terms, suggesting that transparency facilitates learning across a bank's different geographic regions …
Persistent link: https://www.econbiz.de/10012422029