expectations by Bayesian learning based on observations from their own lifetimes. In this model, the stock price exhibits … stochastic boom-and-bust fluctuations around the rational expectations equilibrium. This heterogeneous-agents economy can be …

rules affect the conditions for convergence of adaptive learning towards rational expectations equilibrium. Results are …

expectations, which is detrimental to welfare. …

Rational expectations has been the dominant way to model expectations, but the literature has quickly moved to a more … their expectations. A standard assumption is that agents form expectations by using the correctly specified reduced form … included. Therefore, agents base expectations on a misspecified MSV solution. In contrast, we assume agents know the deep …

knowledge of their personal circumstances but "sticky expectations" about the macroeconomy. In our model, the persistence of …

may or may not coordinate on the rational equilibrium outcome. A general finding is that under positive expectations … feedback (strategic complementarity) - where optimistic (pessimistic) expectations can cause a boom (bust) - coordination … by coordination on trend-following behavior leading to (almost-)self-fulfilling equilibria. Heterogeneous expectations …

Rational expectations has been the dominant way to model expectations, but the literature has quickly moved to a more … their expectations. A standard assumption is that agents form expectations by using the correctly specified reduced form … included. Therefore, agents base expectations on a misspecified MSV solution. In contrast, we assume agents know the deep …

expectations by Bayesian learning based on observations from their own lifetimes. In this model, the stock price exhibits … stochastic boom-and-bust fluctuations around the rational expectations equilibrium. This heterogeneous-agents economy can be …