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To See is to Believe : Common Expectations in Experimental Asset Markets
Cheung, Stephen L. - 2012
We challenge the recent claim that mispricing in the experimental asset markets introduced by Smith, Suchanek, and Williams (1988) is merely an artefact of confusion over declining fundamental value, and can be eliminated through appropriate training. We instead propose that when training is...
Persistent link: https://www.econbiz.de/10013099096
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Rationalizing Rational Expectations? Tests and Deviations
D'Haultfœuille, Xavier - 2018
In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched....
Persistent link: https://www.econbiz.de/10012906482
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Forecasting Errors : Yet More Problems for Identification?
Contini, Bruno - 2009
Forecasting errors pose a serious problem of identification, often neglected in empirical applications. Any attempt of estimating choice models under uncertainty may lead to severely biased results in the presence of forecasting errors even when individual expectations on future events are...
Persistent link: https://www.econbiz.de/10012764650
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On Gender Gaps and Self-Fulfilling Expectations : Theory, Policies and Some Empirical Evidence
de la Rica, Sara - 2008
This paper considers a simple model of self-fulfilling expectations that leads to a multiple equilibrium of gender gaps in wages and participation rates. Rather than resorting to moral hazard problems related to unobservable effort, like in most of the related literature, our model fully relies...
Persistent link: https://www.econbiz.de/10012771577
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Randomizing Endowments : An Experimental Study of Rational Expectations and Reference-Dependent Preferences
Goette, Lorenz - 2014
An important advance in the study of reference-dependent preferences is the discipline provided by coherent accounts of reference point formation. Kőszegi and Rabin (2006) provide such discipline by positing a reference point grounded in rational expectations. We examine the predictions of...
Persistent link: https://www.econbiz.de/10013043666
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Optimal Price Indices for Targeting Inflation Under Incomplete Markets
Anand, Rahul - 2010
In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting a target based on headline rather …
Persistent link: https://www.econbiz.de/10013139035
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Hyperbolic Discounting and Positive Optimal Inflation
Graham, Liam - 2011
Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations …
Persistent link: https://www.econbiz.de/10013125143
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Labor Turnover Costs, Workers' Heterogeneity, and Optimal Monetary Policy
Faia, Ester - 2009
state contingent inflation taxes/subsidies to smooth those rents. Hence, in the optimal Ramsey plan, inflation deviates from … zero and the optimal volatility of inflation is an increasing function of firing costs. The optimal rule should react to … employment alongside inflation …
Persistent link: https://www.econbiz.de/10013157529
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Distributional Effects of Monetary Policy in Emerging Market Economies
Prasad, Eswar S. - 2015
inflation targeting, exchange rate management benefits households in the tradable goods sector but in the long run these …
Persistent link: https://www.econbiz.de/10013016221
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Monetary Policy and Inequality Under Labor Market Frictions and Capital-Skill Complementarity
Dolado, Juan Jose - 2018
skilled workers being more complementary to capital than substitutable unskilled workers are (CSC channel). Strict inflation … introduce a trade-off between stabilizing inflation and aggregate demand …
Persistent link: https://www.econbiz.de/10012919514