Suppose that the government was to announce that the economy will be booming in six months and that this announcement is based on false data. What effect would such an announcement have on future aggregate activity? This paper employs revisions of the series of leading economic indicators to...

A recurrent theme in the literature on business cycle fluctuations is the importance of expectational shocks that change the beliefs of agents concerning the future level of aggregate activity, but that do not reflect real movements in the fundamentals. This paper employs the ASA-NBER Survey of...

A number of studies have employed strategic complementarity to show that many features of the Keynesian framework can be captured in models consistent with the microfoundations approach. The authors argue that strategic complementarity is an important factor in understanding why an economy may...