This paper develops a theory of expectations-driven business cycles based on learning. Agents have incomplete knowledge … consumption and leisure. Output volatility is comparable with a rational expectations analysis with a standard deviation of … about how market prices are determined and shifts in expectations of future prices affect dynamics. In a real business cycle …

This paper develops a theory of expectations-driven business cycles based on learning. Agents have incomplete knowledge … consumption and leisure. Output volatility is comparable with a rational expectations analysis with a standard deviation of … about how market prices are determined and shifts in expectations of future prices affect dynamics. In a real business cycle …

1 Abstract -- 2 Introduction -- 3 Chapter I: Literature on the subject of excess volatility -- 4 Chapter II: Excess … volatility beyond discount rates -- 5 Chapter III: Evidence of excess volatility in the Eurozone market -- 6 Conclusions. …The phenomenon of excess volatility in the context of share prices and of the term structure of interest rates has been …