Consumer behavior and fluctuations in economic activity

Autor(en): Westerhoff, FH
Stichwörter: business cycles; consumer sentiment; econophysics; Mathematics; Mathematics, Interdisciplinary Applications; Multidisciplinary Sciences; opinion formation; optimism and pessimism; Science & Technology - Other Topics; social interactions
Erscheinungsdatum: 2005
Herausgeber: WORLD SCIENTIFIC PUBL CO PTE LTD
Journal: ADVANCES IN COMPLEX SYSTEMS
Volumen: 8
Ausgabe: 2-3
Startseite: 209
Seitenende: 215
Zusammenfassung: 
We develop a simple Keynesian type business cycle model in which heterogeneous agents are either optimistic or pessimistic. If the majority of the agents axe optimistic, then consumption expenditures axe high and the economy booms, otherwise consumption expenditures are low and the economy is in a recession. Within our model, the sentiment of the agents is affected by their social interactions. For instance, people regularly meet each other and thus their mood may change. Overall, our model suggests that swings in consumer confidence may generate irregular fluctuations in economic activity.
ISSN: 02195259
DOI: 10.1142/S0219525905000452

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