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Asymmetric Effects of Government Spending: Does the Level of Real Interest Rates Matter?

Devereux, Michael B.; Choi, Woon Gyu - Econometric Society - 2004

This paper examines empirical issues on asymmetric effects of government spending. Increases in government spending under low real interest rates are not associated with the same increases in future tax liabilities as those under high real interest rates. Consequently, the negative impact from...

Persistent link: https://www.econbiz.de/10005342311

The Relation Between Macroeconomic Uncertainty And The Expected Performance Of the Economy

Sepulveda-Umanzor, Jean - Econometric Society - 2004

By using data from surveys of expectations, it is shown that macroeconomic uncertainty, measured by the standard …

Persistent link: https://www.econbiz.de/10005328865

Precautionary Saving, Borrowing Constraints, and Fiscal Policy

Park, Cheolbeom; Bishop, Thomas - Econometric Society - 2004

Recent empirical studies suggest that the average marginal propensity to consume (MPC) has declined. This paper explains the declining trend of the MPC with a standard representative consumer model where borrowing constraints become more relaxed as suggested by data. With an increase in...

Persistent link: https://www.econbiz.de/10005063766

Cross Section Vs Time Series Measures of Uncertainty: Using UK Survey Data

Driver, Ciaran; Trapani, Lorenzo - Econometric Society - 2004

three ways: by cross-section dispersion of optimism expectations, by a GARCH series based on the optimism data and by an …

Persistent link: https://www.econbiz.de/10005342212

Imperfect Rationality and Inflationary Inertia: A New Estimation of the Phillips Curve for Brazil

Portugal, Marcelo Savino; Fasolo, Angelo Marsiglia - Econometric Society - 2004

) agents do not have perfect rationality; ii) the imperfection in the agents expectations generating process may be an …

Persistent link: https://www.econbiz.de/10005699614

Adaptive Learning and Inflation Dynamics in a Flexible Price Model

Santoro, Sergio - Econometric Society - 2004

expectations of the firms are formed following the adaptive learning literature …

Persistent link: https://www.econbiz.de/10005342220

Persistence in Monetary Policy Models: Indexation, Habits and Learning with Long-Horizon Expectations

Milani, Fabio - Econometric Society - 2004

consumption. But, differently from most previous literature, we drop the assumption of rational expectations (RE). We assume … will not depend just on one-period-ahead expectations but also on the path of long-term expectations of macroeconomic … monetary model with learning, this paper represents an initial step towards what Ireland (2003) terms "Irrational Expectations …

Persistent link: https://www.econbiz.de/10005342244

Contracting with Risk Aversion and Subjective Beliefs Under Costly State Verification

Nielsen, Carsten Krabbe; Kurz, Mordecai - Econometric Society - 2004

We study the loan contracing problem of Gale and Hellwig (1985) under general assumptions of risk aversion and possibly diverse subjective beliefs of the borrower and lender about the income of the investment. We characterize the optimal contract and show that (i) the contractual payoff in...

Persistent link: https://www.econbiz.de/10005342338

The No Trade Principle in General Environments

Wong, Ngai-Ching; Ng, Man-Chung - Econometric Society - 2004

The no trade principle asserts that risk-neutral agents are not prepared to trade if and only if a common prior exists. The purpose of this article is to provide general versions of this principle. We first study the case when no topological assumption is made on the state space. Bets are...

Persistent link: https://www.econbiz.de/10005342381

Expectation Formation and Endogenous Fluctuations in Aggregate Demand

Dudek, Maciej K. - Econometric Society - 2004

The paper recognizes that expectations and the process of their formation are subject to standard decision making and … utility what expectation formation technology to use and as a consequence what expectations to hold. As economic decisions are … conditioned on expectations holding proper or rational expectations eliminates the possibility of ex ante inefficiencies. The …

Persistent link: https://www.econbiz.de/10005328882