performance of factor models. We complement the analysis with an empirical evaluation of forecasts for the key macroeconomic … factor-based forecasts in short samples with structural change. …

series. Using in-sample regressions and out-of sample forecasts, we show that the predictive power of leverage is roughly …

variables, model it using a dynamic factor model, and compare the resulting forecasts with those from a set of standard time …, the factor-based forecasts are shown to improve upon standard benchmarks for prices, real aggregates, and financial …

We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than … rational expectations. To model this we assume that agents combine limited structural knowledge with a standard adaptive …-up there are important deviations from both rational expectations and purely adaptive learning. Our approach could be applied …

candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment …, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision …-based reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low. …

This paper shows that the Ricardian Equivalence proposition can continue to hold when expectations are not rational and … are instead formed using adaptive learning rules. In temporary equilibrium, with given expectations, Ricardian Equivalence … holds under the standard conditions for its validity under rational expectations. Furthermore, Ricardian Equivalence holds …

and monetary policies proposed by Leeper (1991), for stability under learning of the rational expectations equilibria (REE …

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump …-sum taxes. Agents combine knowledge about future policy with econometric forecasts of future wages and interest rates. Both …