A consistent representation of Keynes’s long-term expectation in ?nancial market

Marcello Basili, Alain Chateauneuf and Giuseppe Scianna ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: This paper advances an intuitive representation of Keynes’s notion of long-term expectation. We introduce the epsilon-contamination approach and represent the conventional judgment by the Steiner point of agents’ common probability set. We anticipate a change in conventional judgment by updating the Steiner point.

Keywords: Keynes; long-term expectation; epsilon contamination; uncertainty; multiple priors. (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-hpe and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:808

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