How do real-time expectations affect firms' economic decisions? We provide evidence by using a dataset on Japanese … multinational firms' sales forecasts and exploring an unexpected escalation of a territorial dispute between China and Japan in 2012 … persistent decline in investment. Moreover, the territorial dispute has led to persistent pessimism in these firms' expectations …

Economists have long emphasized the importance of expectations in determining macroeconomic outcomes Yet there has been … almost no recent effort to model actual empirical expectations data; instead macroeconomists usually simply assume … expectations are rational This paper shows that while empirical household expectations are not rational in the usual sense …

variable. Although the model has standard technology and policy shocks, diverse expectations change materially standard results …

We investigate the role played by the media in the expectations formation process of households. Using a novel news … of households' stated inflation expectations. In turn, in a noisy information model setting, augmented with a simple …, robust and new evidence highlighting the role of the media for understanding inflation expectations and information …