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Monetary Policy Analysis When Planning Horizons are Finite
Woodford, Michael - 2018
-consistent expectations. This implicitly assumes unrealistic cognitive abilities on the part of economic decision makers. The relevant … question, however, is not whether the assumption can be literally correct, but how much it would matter to model decision … problems such as chess or go, in which decision makers look ahead only a finite distance into the future, and use a value …
Persistent link: https://www.econbiz.de/10012917036
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Cognitive Economics
Kimball, Miles S. - 2015
Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called “bounded rationality …
Persistent link: https://www.econbiz.de/10013030618
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Numeracy, Financial Literacy, and Financial Decision-Making
Lusardi, Annamaria - 2012
Financial decisions, be they related to asset building or debt management, require the capacity to do calculations, including some complex ones. But how numerate are individuals, in particular when it comes to calculations related to financial decisions? Studies and surveys implemented in both...
Persistent link: https://www.econbiz.de/10013110939
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Occupational Classifications : A Machine Learning Approach
Ikudo, Akina - 2018
, classification has been done manually. If it were possible to combine new computational tools and administrative wage records to …
Persistent link: https://www.econbiz.de/10012911708
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A Sparsity-Based Model of Bounded Rationality
Gabaix, Xavier - 2011
This paper defines and analyzes a "sparse max" operator, which is a less than fully attentive and rational version of the traditional max operator. The agent builds (as economists do) a simplified model of the world which is sparse, considering only the variables of first-order importance. His...
Persistent link: https://www.econbiz.de/10013127754
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A Unified Theory of Underreaction, Momentum Trading and Overreaction in Asset Markets
Hong, Harrison G. - 2008
We assume that the instantaneous riskless rate reverts towards a central tendency which in turn, is changing stochastically over time. As a result, current short-term rates are notquot; sufficient to predict future short-term rates movements, as would be the case if the centralquot; tendency was...
Persistent link: https://www.econbiz.de/10012774922
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Monetary Policy, Bounded Rationality, and Incomplete Markets
Farhi, Emmanuel - 2017
This paper extends the benchmark New-Keynesian model by introducing two frictions: (1) agent heterogeneity with incomplete markets, uninsurable idiosyncratic risk, and occasionally binding borrowing constraints; and (2) bounded rationality in the form of level-k thinking. Compared to the...
Persistent link: https://www.econbiz.de/10012960160
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A Theory of Civil Disobedience
Glaeser, Edward L. - 2015
the disturbance hoping to influence voters (or other decision-makers in less democratic regimes) both through the size of …
Persistent link: https://www.econbiz.de/10013019505
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Bounded Rationality and Strategic Complementarity in a Macroeconomic Model : Policy Effects, Persistence and Multipliers
Bomfim, Antulio N.; Diebold, Francis X. - 2021
Motivated by recent developments in the bounded rationality and strategic complementarity literatures, we examine an intentionally simple and stylized aggregative economic model, when the assumptions of fully rational expectations and no strategic interactions are relaxed. We show that small...
Persistent link: https://www.econbiz.de/10013222039
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Paternalism and Psychology
Glaeser, Edward L. - 2021
the beliefs of millions of consumers than a handful of bureaucrats. As such, recognizing the limits of human cognition may …
Persistent link: https://www.econbiz.de/10013239179