We study the course of the Swiss price level during the recent episode where Switzerland enforced a floor on the Swiss Franc exchange rate relative to the Euro. Given the strong nominal upward pressure on the Swiss currency the introduced limit of 1.20 Francs per Euro led to a quasi-fixed...

This study takes up Keynes' ideas concerning long-term expectations, particularly his notion that expectations are subject to sudden changes with strong effects on economic activity. We start by detailing Keynes' views regarding the nature of expectations and their role in the business cycle. I...

Purpose ndash; This paper analyzes forecasting problems from the perspective of information extraction. We study circumstances under which the forecast of an economic variable from one domain (country, industry, market segment) should rely on information regarding the same type of variable from...

Business cycles have historically been an important topic for behaviorally orientedeconomists. The concept of an economic and financial cycle based on interlocking mechanismsleading from the recession to the boom was developed in the 18th and 19th century. The earlybehavioral economics of the...

This note discusses a range of cases where the proposition that one plus one is more or less than two makes sense. Simple examples from the natural world indicate that interaction (reproduction and predator-prey interaction) between addable units can change their sum. A case drawn from commerce...

As one of the first texts to take a behavioral approach to macroeconomic expectations, this book introduces a new way of doing economics. Rötheli uses cognitive psychology in a bottom-up method of modeling macroeconomic expectations. His research is based on laboratory experiments and...

This article starts with the conjecture that the subjective element of expectations is important for understanding and measuring the effects of government’s indebtedness on financial market rates. For this purpose we propose a modern model of extrapolative expectations for the Debt-to-GDP...

This study applies the concept of pattern-based inflation expectations to the measurement of U.S. real rates of interest. The measure of expected inflation builds on a laboratory-based survey of expectations. We show how our measures of real interest rates differ from measures based on the...

This is a short review of hypotheses on expectations formation in economics. The text focuses on the competition between the notions of rational and extrapolative expectations. A thought experiment is offered to rationalize the ongoing popularity of rational expectations