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individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …
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individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …
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rationality. Economic agents form their expectations using heuristics - they choose between a few simple rules based on their past …
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This paper's field evidence is: (1) many official sectors rapidly forget the damage of the 1982-85 exchange rate liquidity crisis and reverted to what caused that crisis, namely a closed economy clean floats perspective; and (2) the 2006-2008/9 exchange rate liquidity shock would have been more...
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