We explore the consequences of losing confidence in the price-stability objective of central banks by quantifying the inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint, we show that an inflation bias as well as a...

This paper addresses a general problem with surveys asking agents for their assessment of the state of the economy: answers are highly dependent on information that is publicly available, while only information that is not already publicly known has the potential to improve a professional...

In order to aspire to join the EU that the Republic of Moldova (currently a candidate country) has, the main economic conditions it must satisfy are the existence of a functional market economy, as well as the ability to face competitive pressure and market forces in within the European Union....

The authors (Langvinienė, 2014; Prentice, 2020; Grasso & Sergi, B.S. Eds., 2021) claim that over the past few decades, tourism has continuously expanded and strived to become one of the largest and fastest growing economic sectors in the world. Tourism is primarily a vital industry for the social and...

In theory and practice, there comes to increase in focus to digitalization in agriculture, as well as about the rational use of available natural resources, primarily land, water and energy. The use of renewables, such is solar energy, can be done in various purposes, for example for energy...

I show how irrational ideas and rumors can drive asset prices - not because anyone believes them, but because they are commonly known without being common knowledge. The phenomenon is driven by short-term market participants who are well-informed about the information that others have, and who...

Many papers have reported behavioral biases in belief formation that come on top of standard game-theoretic reasoning. We show that the processes involved depend on the way participants reason about their beliefs. When they think about what everybody else or another "unspeci fied" individual is...

We analyze differences in consumption and wealth that arise because of different degrees of rationality of households. In particular, we use a standard New Keynesian model and let a certain fraction of households be fully rational while the other fraction possesses less cognitive ability. We...

We analyze the impact of overconfidence on gender differences in wage expectations using elicited beliefs of German university applicants. Interestingly, female students have lower wage expectations and are less overconfident than their male counterparts. Oaxaca-Blinder decompositions show that...

What is the role of heterogenous house-price expectations for boom-bust cycles in the housing market? We exploit a unique Dutch panel data set on households' house price expectations and their consumption, savings and housing choices for the period 2003-2016. This period was characterized by a...