Imperfect Knowledge, Asset Price Swings and Structural Slumps: A Cointegrated VAR Analysis of Their Interdependence

Katarina Juselius

No 10-31, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: This paper is an empirically based discussion of interactions between speculative behavior in the currency markets and aggregate fluctuations in the real economy. It builds on the recent theory of Imperfect Knowledge Economics in Frydman and Goldberg (2007) and combines this with the Structural Slumps theory in Phelps (1994). The paper argues that this is likely to imcrease our understanding of the long recurrent spells of high unemployment that continue to mar our economies.

Keywords: financial markets; speculation; long swings; imperfect knowledge; CVAR (search for similar items in EconPapers)
JEL-codes: E24 F31 F41 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cba, nep-knm and nep-mac
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1031

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