Standard solution methods for linear rational expectations models assume a time-invariant structure. Recent work has gone beyond this by formulating solution methods for linear rational expectations models subject to structural changes, such as parameter shifts and policy reforms, that are...

We set out a behavioural model of the stock market in which investors are connected through a social network. Agents may adopt types on the spectrum from pure fundamentalist to arbitrarily strong chartist which they update from their neighbours depending on past performance. Our main analytical...

The banking crisis has caused a resurgence of interest in behavioural models of expectations in macroeconomics. Here we evaluate behavioural and rational expectations econometrically in a New Keynesian framework, using US post-war data and the method of indirect inference. We find that after...