. Bayesian learning implies that beliefs about the likelihood of rare disasters drop to a much more pessimistic level once a … disaster has occurred. Such a shift in beliefs can trigger massive declines in price-dividend ratios. Pessimistic beliefs … between rational and adaptive Bayesian learning. Rational learners account for the possibility of future changes in beliefs in …

What are the effects of beliefs, sentiment, and uncertainty, over the business cycle? To answer this question, we …) and their beliefs may be influenced by their perceptions about future uncertainty. We estimate the behavioral model using … fluctuations. Shifts in perceived uncertainty can also affect real activity and inflation through a confidence channel, as they …

imbalances across time and countries. Current policy makers behavior influences agents ' beliefs about the way debt will be …, can unfold over decades, and accelerate as agents' beliefs deteriorate. Dormant shocks explain the run-up of US inflation … and uncertainty in the 70s. The currently low long term interest rates and inflation expectations might hide the true risk …