EconPapers    
Economics at your fingertips  
 

Sentiments and Aggregate Demand Fluctuations

Jess Benhabib (), Pengfei Wang () and Yi Wen ()

Econometrica, 2015, vol. 83, 549-585

Abstract: We formalize the Keynesian insight that aggregate demand driven by sentiments can generate output fluctuations under rational expectations. When production decisions must be made under imperfect information about demand, optimal decisions based on sentiments can generate stochastic self‐fulfilling rational expectations equilibria in standard economies without persistent informational frictions, externalities, nonconvexities, or strategic complementarities in production. The models we consider are deliberately simple, but could serve as benchmarks for more complicated equilibrium models with additional features.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (50) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/

Related works:
Working Paper: Sentiments and aggregate demand fluctuations (2012) Downloads
Working Paper: Sentiments and Aggregate Demand Fluctuations (2012) Downloads
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:wly:emetrp:v:83:y:2015:i::p:549-585

Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues

Access Statistics for this article

Econometrica is currently edited by Guido W. Imbens

More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-07-17
Handle: RePEc:wly:emetrp:v:83:y:2015:i::p:549-585