As one of the first texts to take a behavioral approach to macroeconomic expectations, this book introduces a new way of doing economics. Rötheli uses cognitive psychology in a bottom-up method of modeling macroeconomic expectations. His research is based on laboratory experiments and...

"The notion that expectations play a key role in economic decision making is a very old one. Over the past 100 years, major advances in the application of this insight in the formulation of economic models have been made in various subfields of economics. The concept of extrapolation, the idea...

For Germany and Switzerland, unlike for the US, data from periodic surveys of producing firms exist. These surveys cover questions regarding price setting and output decisions that are relevant for the study of inflation dynamics. The New Keynesian Phillips curve, in particular, holds that...

This paper presents an empirically based model of rational expectations. Bottom-up inflation expectations are computed using data from a once-only laboratory-based survey. To capture cognition under habitual conditions (Kahneman, 2003) we elicit subjects' responses to stylized time series...