Misperceptions, heterogeneous expectations and macroeconomic dynamics

Tim Taylor and Richard Harrison
Additional contact information
Tim Taylor: Bank of England

No 710, 2008 Meeting Papers from Society for Economic Dynamics

Abstract: We explore the behaviour of our model when agents have access to two simple predictors, one of which is consistent with a mistaken belief that macroeconomic variables are more persistent. We show that the presence of a `persistent predictor' can lead to changes in beliefs which are self reinforcing, giving rise to endogenous fluctutions in the time series properties of the economy. Moreover, we show that such fluctuations arise even if we replace the `persistent predictor' with learning under constant gain.

Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2008/paper_710.pdf (application/pdf)

Related works:
Working Paper: Misperceptions, heterogeneous expectations and macroeconomic dynamics (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed008:710

Access Statistics for this paper

More papers in 2008 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().