HEURISTIC EXPECTATION FORMATION AND BUSINESS CYCLES: A SIMPLE LINEAR MODEL

Autor(en): Westerhoff, Frank H.
Stichwörter: Business & Economics; Economics
Erscheinungsdatum: 2008
Herausgeber: WILEY-BLACKWELL PUBLISHING, INC
Journal: METROECONOMICA
Volumen: 59
Ausgabe: 1
Startseite: 47
Seitenende: 56
Zusammenfassung: 
We develop a Keynesian business cycle model to study how extrapolative and regressive expectation formation rules may affect fluctuations in economic activity. We find that simple expectation formation rules may have an impact on the level and the stability of the equilibrium income, the size of the multiplier and the resulting adjustment process after an exogenous shocks. Our model also reveals that national income may be influenced by how agents perceive their long-run average income.
ISSN: 00261386
DOI: 10.1111/j.1467-999X.2007.00290.x

Show full item record

Page view(s)

1
Last Week
0
Last month
0
checked on Mar 5, 2024

Google ScholarTM

Check

Altmetric