The behavioral economics of currency unions: Economic integration and monetary policy

Bertasiute, Akvile; Massaro, Domenico; Weber, Matthias

doi:10.1016/j.jedc.2020.103850

Cited by 19 publications

(9 citation statements)

References 38 publications

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“…For a nice and rather comprehensive overview of macroexperiments, seeDuffy (2016). Behavioural macroeconomic theory papers have also recently built upon experiments, e.g., De Grauwe and Macchiarelli (2015),Cole and Milani (2017), andBertasiute et al (2018), to mention but a few. 2 In LtFE, participants in the experiment play the role of professional forecasters.…”

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confidence: 99%

On the External Validity of Experimental Inflation Forecasts: A Comparison with Five Categories of Field Expectations

Cornand

Hubert

2018

SSRN Journal

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Establishing the external validity of experimental inflation forecasts is essential if laboratory experiments are to be used as decision-making tools for monetary policy. Our contribution is to document whether different measures of inflation expectations, based on various categories of agents (participants in experiments, households, industry forecasters, professional forecasters, financial market participants and central bankers), share common patterns. We do so by analysing the forecasting performance of these different categories of data, their deviations from full information rational expectations, and the variables that enter the determination of these expectations. Overall, the different categories of forecasts exhibit common features: forecast errors are comparably large and autocorrelated, and forecast errors and forecast revisions are predictable from past information, suggesting the presence of some form of bounded rationality or information imperfections. Finally, lagged inflation positively affects the determination of inflation expectations. While experimental forecasts are relatively comparable to survey and financial market data, more heterogeneity is observed compared to central bank forecasts.

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confidence: 99%

On the External Validity of Experimental Inflation Forecasts: A Comparison with Five Categories of Field Expectations

Cornand

Hubert

2018

SSRN Journal

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“…Introducing the evolutionary learning model of expectation formation into a macroeconomic monetary union model is what we do in Bertasiute et al (2020a). In that article, we provide the first behavioral multi-country New Keynesian monetary union model.…”

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confidence: 99%

“…The research documented in Bertasiute et al (2020a) was carried out entirely before the Covid-19 crisis hit. However, the findings are relevant for that crisis.…”

Section: Hommes Et Al (mentioning

confidence: 99%

From Individual Human Decisions to Economic and Financial Policies

Weber¹

2022

Preprint

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It is a great honor for me to have received the University Latsis Prize from the Fondation Latsis Internationale. In this text, I describe the research for which the prize has been awarded and the research agenda to which these works belong. In a nutshell, my work analyzes how individuals make economic and financial decisions, when outcomes are uncertain and when the laws governing economic behavior are unknown. These individual decisions usually differ from the rational utility maximization assumed in traditional models. My work then tries to understand to what aggregate outcomes and policy implications such boundedly rational behavior leads in financial markets, in the macroeconomy, and in public finance and public economics.

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“…This would appear to be a particularly important application of the logic described in the present paper, given the well recorded evidence of non-linearities and stochastic volatility in exchange rate dynamics (Moosa, 2000). However, at the time of writing, there are only two working papers examining open economy issues from a BNK perspective (Jang, 2015;Bertasiute et al, 2018), and a single published article (De Grauwe and Ji, 2017).…”

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confidence: 99%

Behavioural New Keynesian models

Jump

Levine

2019

Journal of Macroeconomics

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This paper provides a bird's eye view of the behavioural New Keynesian literature. We discuss three key empirical regularities in macroeconomic data which are not accounted for by the standard New Keynesian model, namely, excess kurtosis, stochastic volatility, and departures from rational expectations. We then present a simple behavioural New Keynesian model that accounts for these empirical regularities in a straightforward manner. We discuss elaborations and extensions of the basic model, and suggest areas for future research.

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The behavioral economics of currency unions: Economic integration and monetary policy

Cited by 19 publications

References 38 publications

On the External Validity of Experimental Inflation Forecasts: A Comparison with Five Categories of Field Expectations

On the External Validity of Experimental Inflation Forecasts: A Comparison with Five Categories of Field Expectations

From Individual Human Decisions to Economic and Financial Policies

Behavioural New Keynesian models

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