Monetary Policy Under Behavioral Expectations: Theory and Experiment

Abstract

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Inflation Announcements and Social Dynamics

“…Recent papers that use this approach include Anufriev et al. (), Cornea, Hommes, and Massaro (), Hommes (), and Hommes, Massaro, and Weber (). See also Brazier et al.…”

Inflation Expectations and Monetary Policy Design: Evidence From the Laboratory

“…Recently, a setup similar to ours has been used by Assenza et al (2013), who focus on the analysis of switching between different forecasting rules, and by Kryvtsov and Petersen (2013), who quantify the contribution of systematic monetary policy for macroeconomic stabilization. Also, Hommes et al (2015) and Petersen (2015) study the effects of monetary policy using laboratory experiments. Compared to our companion papers, Pfajfar andŽakelj (2011Pfajfar andŽakelj ( , 2014, this paper focuses on the effects of monetary policy (treatment effects) on inflation expectations and thus on the dynamics of inflation.…”

Behavioral Optimal Taxation: The Case of Aspirations

“…In the experiments I conducted (Weber and Schram, 2017;Weber, 2017;Hommes et al, 2017;Weber et al, 2018;Kopányi-Peuker and Weber, 2018), the results always differ decisively from full rationality (the only experiment that also finds some support for rational behavior is the bond pricing experiment, Weber et al, 2018, where first-round prices are far from the equilibrium, but aggregate outcomes in the last round of the experiment are surprisingly close to the rational equilibrium).…”