Macroeconomic Expectations Of Households And Professional ForecastersThe Quarterly Journal of Economics, 2003, vol. 118, issue 1, pages 269-298 Abstract: Economists have long emphasized the importance of expectations in determining macroeconomic outcomes. Yet there has been almost no recent effort to model actual empirical expectations data; instead, macroeconomists usually simply assume that expectations are "rational." This paper shows that while empirical household expectations are not rational in the usual sense, expectational dynamics are well captured by a model in which households' views derive from news reports of the views of professional forecasters, which in turn may be rational. The model's estimates imply that people only occasionally pay attention to news reports; this inattention generates "stickyness" in aggregate expectations, with important macroeconomic consequences. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology Date: 2003 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:tpr:qjecon:v:118:y:2003:i:1:p:269-298 Ordering information: This journal article can be ordered from Access Statistics for this article The Quarterly Journal of Economics is edited by Robert J. Barro, Edward L. Glaeser and Lawrence F. Katz More articles in The Quarterly Journal of Economics from MIT Press |
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