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dc.contributor.authorBullard, Jamesen_GB
dc.contributor.authorEvans, George W.en_GB
dc.contributor.authorHonkapohja, Seppoen_GB
dc.date.accessioned2006-03-14T14:55:18Z
dc.date.available2006-03-14T14:55:18Z
dc.date.created2005-10en_GB
dc.date.issued2006-03-14T14:55:18Z
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/131588
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/131588
dc.description.abstractWe study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic environments. Examples include a simple asset pricing model and the New Keynesian monetary policy framework. Inclusion of judgement in forecasts can lead to self-fulfilling fluctuations, but without the requirement that the underlying rational expectations equilibrium is locally indeterminate. We suggest ways in which policymakers might avoid unintended outcomes by adjusting policy to minimize the risk of exuberance equilibria.en_GB
dc.format.extent495120 bytes
dc.format.mimetypeapplication/pdfen_GB
dc.format.mimetypeapplication/pdf
dc.language.isoen_GB
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subject.classificationClassification-JEL: E520, E610en_GB
dc.titleNear-Rational Exuberanceen_GB
dc.typeWorking Paper
dc.identifier.doi10.17863/CAM.5386


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