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Self-Fulfilling Expectations and Fluctuations in Aggregate Demand
Woodford, Michael - 2010
The paper presents an intertemporal general equilibrium model with rationing in the product market, in which stationary sunspot equilibria are shown to exist, indicating the possibility of fluctuations in economic activity simply due to self-fulfilling variations in economic agents'...
Persistent link: https://www.econbiz.de/10013138365
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From Chronic Inflation to Chronic Deflation : Focusing on Expectations and Liquidity Disarray Since Wwii
Calvo, Guillermo A. - 2016
The paper discusses policy relevant models, going from (1) chronic inflation in the 20th century after WWII, to (2 …
Persistent link: https://www.econbiz.de/10012984757
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The Business Cycles of Balance-of-Payment Crises : a Revision of Mundellan Framework
Mendoza, Enrique G.; Uribe, Martín - 2021
In his seminal 1960 article Robert Mundell proposed a model of balance-of-payments crises in which confidence in the continuation of a currency peg depended on the observed holdings of central bank foreign reserves. We examine the implications of a reformulation of this view from the perspective...
Persistent link: https://www.econbiz.de/10013235602
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Imperfect Knowledge, Inflation Expectations, and Monetary Policy
Orphanides, Athanasios; Williams, John C. - 2021
perform poorly when knowledge is imperfect. In particular, policies that fail to maintain tight control over inflation are … prone to episodes in which the public's expectations of inflation become uncoupled from the policy objective and stagflation … effective communication of a central bank's inflation objective and of continued vigilance against inflation in anchoring …
Persistent link: https://www.econbiz.de/10013220775
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Growth Expectations, Dividend Yields, and Future Stock Returns
Da, Zhi - 2014
According to the dynamic version of the Gordon growth model, the long-run expected return on stocks, stock yield, is the sum of the dividend yield on stocks plus some weighted average of expected future growth rates in dividends. We construct a measure of stock yield based on sell-side analysts'...
Persistent link: https://www.econbiz.de/10013044614
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Exchange-Rate Expectations and Nominal Interest Differentials : A Test Ofthe Fisher Hypothesis
Cumby, Robert E.; Obstfeld, Maurice - 2021
This note tests the hypothesis that nominal interest differentials between similar assets denominated in different currencies can be explained entirely by the expected change in the exchange rate over the holding period. This proposition, often called the "Fisher open" hypothesis or the...
Persistent link: https://www.econbiz.de/10013222938
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Anchoring Fiscal Expectations
Leeper, Eric M. - 2010
In this lecture, I argue that there are remarkable parallels between how monetary and fiscal policies operate on the macro economy and that these parallels are sufficient to lead us to think about transforming fiscal policy and fiscal institutions as many countries have transformed monetary...
Persistent link: https://www.econbiz.de/10013151140
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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/10012907747
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Investors' Portfolio Behavior Under Alternative Models of Long-Term Interest Rate Expectations : Unitary, Rational, or Autoregressive
Friedman, Benjamin M. - 2010
implications for further aspects of investors' portfolio behavior, including expectations formation, response to inflation, and …
Persistent link: https://www.econbiz.de/10012763222
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Using Expectations Data to Study Subjective Income Expectations
Dominitz, Jeff - 2010
We have collected data on the one-year-ahead income expectations of members of American households in our Survey of Economic Expectations (SEE), a module of a national continuous telephone survey conducted at the University of Wisconsin. The income-expectations questions take this form: `What do...
Persistent link: https://www.econbiz.de/10012763557