Interactive expectations

John Foster () and Burkhard Flieth ()
Additional contact information
Burkhard Flieth: ITERGO, Thomas-Dehler-Stra, e 2, 81737 M, nchen, Germany

Journal of Evolutionary Economics, 2002, vol. 12, issue 4, 375-395

Abstract: In modeling expectation formation, economic agents are usually viewed as forming expectations adaptively or in accordance with some rationality postulate. We offer an alternative nonlinear model where agents exchange their opinions and information with each other. Such a model yields multiple equilibria, or attracting distributions, that are persistent but subject to sudden large jumps. Using German Federal Statistical Office economic indicators and German IFO Poll expectational data, we show that this kind of model performs well in simulation experiments. Focusing upon producers' expectations in the consumption goods sector, we also discover evidence that structural change in the interactive process occurred over the period of investigation (1970-1998). Specifically, interactions in expectation formation seem to have become less important over time.

Keywords: Expectations; -; Business; cycle; -; Business; climate; -; Interaction; -; Interdependence; -; Communication; -; Opinion; polls; -; Non-linear; -; Germany (search for similar items in EconPapers)
Date: 2002-10-11
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://link.springer.de/link/service/journals/00191/papers/2012004/20120375.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joevec:v:12:y:2002:i:4:p:375-395

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/191/PS2

Access Statistics for this article

Journal of Evolutionary Economics is currently edited by Uwe Cantner, Elias Dinopoulos, Horst Hanusch and Luigi Orsenigo

More articles in Journal of Evolutionary Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().