Near-Rational Expectations: How Far are Surveys from Rationality?
Sergey Ivashchenko and
Rangan Gupta
EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels
Abstract:
New simple forms of deviation from rational expectations (RE) are suggested: temporary near-rational expectations (TNRE) and persistent near-rational expectations (PNRE). The medium-scale DSGE model was estimated with the RE, the TNRE and the PNRE. It was estimated with and without observations from the survey's expectations. The quality of the out-of-sample forecasts was estimated. It is shown that near-rational concepts produce the same advantages as learning, without its disadvantages (including the absence of ‘learning expectations’ reactions on policy change). The influence of the observed expectations on forecasting quality was analysed.
Keywords: DSGE; out-of-sample forecasts; survey expectations; near-rational expectations. (search for similar items in EconPapers)
JEL-codes: E32 E37 E47 (search for similar items in EconPapers)
Date: 2017-01-04
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.eeri.eu/documents/wp/EERI_RP_2017_04.pdf (application/pdf)
Related works:
Journal Article: Near-Rational Expectations: How Far are Surveys from Rationality? (2017) 
Working Paper: Near-Rational Expectations: How Far are Surveys from Rationality? (2016)
Working Paper: Near-Rational Expectations: How Far Are Surveys from Rationality? (2014) 
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:eei:rpaper:eeri_rp_2017_04
Access Statistics for this paper
More papers in EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels Contact information at EDIRC.
Bibliographic data for series maintained by Julia van Hove ().