Narrow search
Showing 1 - 10 of 126,909
Cover Image
Incorporating diagnostic expectations into the new Keynesian framework
L'Huillier, Jean-Paul; Singh, Sanjay R.; Yoo, Donghoon - 2023
Persistent link: https://www.econbiz.de/10014328771
Cover Image
Incorporating diagnostic expectations into the new Keynesian framework
L'Huillier, Jean-Paul; Singh, Sanjay R.; Yoo, Donghoon - 2023
Persistent link: https://www.econbiz.de/10014328949
Cover Image
Incorporating Diagnostic Expectations into the New Keynesian Framework
L'Huillier, Jean-Paul; Singh, Sanjay R.; Yoo, Donghoon - 2021
Diagnostic expectations constitute a realistic behavioral model of inference. This paper shows that this approach for expectation formation can be productively integrated into the New Keynesian framework. To this end, we start by offering a first technical treatment of diagnostic expectations in...
Persistent link: https://www.econbiz.de/10013213827
Cover Image
Perceived uncertainty shocks, excess optimism-pessimism, and learning in the business cycle
Chatterjee, Pratiti; Milani, Fabio - 2020
horizons from the Survey of Professional Forecasters. We find that sentiment shocks are the key source of business cycle … business cycles, and on the contribution and interaction of first-moment - sentiment - shocks versus second-moment - perceived … uncertainty - shocks. …
Persistent link: https://www.econbiz.de/10012294890
Cover Image
Diagnostic Expectations and Macroeconomic Volatility
L'Huillier, Jean-Paul; Singh, Sanjay R.; Yoo, Donghoon - 2021
Diagnostic expectations have emerged as an important departure from rational expectations in macroeconomics and finance. We present a first treatment of diagnostic expectations in linear macroeconomic models. To this end, we establish a strong additivity property for diagnostic expectations. The...
Persistent link: https://www.econbiz.de/10013241641
Cover Image
The Effects of Investor Confidence Shocks on Business Cycles
Kedia, Jai - 2021
shocks to investor confidence. Shocks of this nature manifest themselves as per period changes to financial intermediaries …' leverage ratios. A Bayesian MCMC approach is utilized to estimate the base and extended model, including shock process … confidence shocks have a large and sustained effect on the real economy. Overconfidence initially provides a boost to the economy …
Persistent link: https://www.econbiz.de/10013214960
Cover Image
Internal Rationality, Heterogeneity, and Complexity in the New Keynesian Model
Hommes, Cars H. - 2017
This paper studies the dynamic behaviour of a workhorse New Keynesian model in which households and firms can be fully rational or internally rational. First, we derive the model with a fixed proportion (1−n) of agents fully rational and a fixed proportion (1−n) of agents internally...
Persistent link: https://www.econbiz.de/10012941493
Cover Image
Estimation of Heuristic Switching in Behavioral Macroeconomic Models
Kukacka, Jiri; Sacht, Stephen - 2021
This paper offers a simulation-based method for the estimation of heuristic switching in nonlinear macroeconomic models. Heuristic switching is an important feature of modeling strategy since it uses simple decision rules of boundedly rational heterogeneous agents. The simulation study shows...
Persistent link: https://www.econbiz.de/10013238343
Cover Image
Heterogeneity in individual expectations, sentiment, and constant-gain learning
Cole, Stephen J.; Milani, Fabio - 2020
The adaptive learning approach has been fruitfully employed to model the formation of aggregate expectations at the macroeconomic level, as an alternative to rational expectations. This paper uses adaptive learning to understand, instead, the formation of expectations at the micro-level, by...
Persistent link: https://www.econbiz.de/10012226634
Cover Image
Survey Data and Subjective Beliefs in Business Cycle Models
Bhandari, Anmol - 2019
This paper develops a theory of subjective beliefs that departs from rational expectations, and shows that biases in household beliefs have quantitatively large effects on macroeconomic aggregates. The departures are formalized using model-consistent notions of pessimism and optimism and are...
Persistent link: https://www.econbiz.de/10012903429