Beyond rational expectations: The effects of heuristic switching in an Overlapping Generations model
Author
Abstract
Suggested Citation
DOI: 10.1016/j.jebo.2018.09.007
Download full text from publisher
As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.
Other versions of this item:
- Brecht Boone & Ewoud Quaghebeur, 2018. "Beyond Rational Expectations: The Effects Of Heuristic Switching In An Overlapping Generations Model," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 18/943, Ghent University, Faculty of Economics and Business Administration.
References listed on IDEAS
- Klaus Adam, 2007.
"Experimental Evidence on the Persistence of Output and Inflation,"
Economic Journal, Royal Economic Society, vol. 117(520), pages 603-636, April.
- Adam, Klaus, 2005. "Experimental Evidence on the Persistence of Output and Inflation," CEPR Discussion Papers 4885, C.E.P.R. Discussion Papers.
- Adam, Klaus, 2005. "Experimental evidence on the persistence of output and inflation," Working Paper Series 492, European Central Bank.
- Gaunersdorfer, Andrea & Hommes, Cars H. & Wagener, Florian O.O., 2008.
"Bifurcation routes to volatility clustering under evolutionary learning,"
Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 27-47, July.
- Gaunersdorfer, A. & Hommes, C.H. & Wagener, F.O.O., 2003. "Bifurcation Routes to Volatility Clustering under Evolutionary Learning," CeNDEF Working Papers 03-03, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- repec:dau:papers:123456789/11047 is not listed on IDEAS
- Hommes, Cars H., 2014.
"Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria,"
Review of Behavioral Economics, now publishers, vol. 1(1-2), pages 75-97, January.
- Hommes, C.H., 2013. "Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria," CeNDEF Working Papers 13-17, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Cars Hommes, 2013. "Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria," Tinbergen Institute Discussion Papers 13-204/II, Tinbergen Institute.
- Heemeijer Peter & Hommes Cars & Sonnemans Joep & Tuinstra Jan, 2012. "An Experimental Study on Expectations and Learning in Overlapping Generations Models," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 16(4), pages 1-49, October.
- Agliari, Anna & Hommes, Cars H. & Pecora, Nicolò, 2016.
"Path dependent coordination of expectations in asset pricing experiments: A behavioral explanation,"
Journal of Economic Behavior & Organization, Elsevier, vol. 121(C), pages 15-28.
- Agliari, A. & Hommes, C.H. & Pecora, N., 2015. "Path Dependent Coordination of Expectations in Asset Pricing Experiments: a Behavioral Explanation," CeNDEF Working Papers 15-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Hommes, Cars, 2011.
"The heterogeneous expectations hypothesis: Some evidence from the lab,"
Journal of Economic Dynamics and Control, Elsevier, vol. 35(1), pages 1-24, January.
- Hommes, C.H., 2010. "The Heterogeneous Expectations Hypothesis: Some Evidence from the Lab," CeNDEF Working Papers 10-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Conesa, Juan Carlos & Krueger, Dirk, 2006.
"On the optimal progressivity of the income tax code,"
Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1425-1450, October.
- Juan Carlos Conesa & Dirk Krueger, 2002. "On the Optimal Progressivity of the Income Tax Code," Centro de Altisimos Estudios Rios Pe©rez(CAERP) 4, Centro de Altisimos Estudios Rios Perez (CAERP).
- Juan Carlos Conesa & Dirk Krueger, 2005. "On the Optimal Progressivity of the Income Tax Code," NBER Working Papers 11044, National Bureau of Economic Research, Inc.
- Juan Carlos Conesa & Dirk Krueger, 2004. "On the Optimal Progressivity of the Income Tax Code," Working Papers 131, Barcelona School of Economics.
- Conesa, Juan Carlos & Krueger, Dirk, 2005. "On the optimal progressivity of the income tax code," CFS Working Paper Series 2005/10, Center for Financial Studies (CFS).
- Conesa, Juan Carlos & Krueger, Dirk, 2005. "On the Optimal Progressivity of the Income Tax Code," CEPR Discussion Papers 5040, C.E.P.R. Discussion Papers.
- Chen, Hung-Ju & Li, Ming-Chia & Lin, Yung-Ju, 2008. "Chaotic dynamics in an overlapping generations model with myopic and adaptive expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 48-56, July.
- William A. Brock & Cars H. Hommes, 1997.
"A Rational Route to Randomness,"
Econometrica, Econometric Society, vol. 65(5), pages 1059-1096, September.
- Brock, W.A. & Hommes, C.H., 1995. "Rational Routes to Randomness," Working papers 9506, Wisconsin Madison - Social Systems.
- Brock, W.A., 1995. "A Rational Route to Randomness," Working papers 9530, Wisconsin Madison - Social Systems.
- William A. Brock & Cars H. Hommes, 1995. "Rational Routes to Randomness," Working Papers 95-03-029, Santa Fe Institute.
- Brock, W.A. & Hommes, C.H., 1996. "A Rational Route to Randomness," Working papers 9530r, Wisconsin Madison - Social Systems.
- Dirk Krueger & Alexander Ludwig, 2013. "Optimal Progressive Labor Income Taxation and Education Subsidies When Education Decisions and Intergenerational Transfers Are Endogenous," American Economic Review, American Economic Association, vol. 103(3), pages 496-501, May.
- Juan Carlos Conesa & Sagiri Kitao & Dirk Krueger, 2009.
"Taxing Capital? Not a Bad Idea after All!,"
American Economic Review, American Economic Association, vol. 99(1), pages 25-48, March.
- Juan C. Conesa & Dirk Krueger, 2004. "Taxing Capital: Not a Bad Idea After All," 2004 Meeting Papers 403, Society for Economic Dynamics.
- Conesa, Juan Carlos & Kitao, Sagiri & Krueger, Dirk, 2006. "Taxing capital? Not a bad idea after all!," CFS Working Paper Series 2006/21, Center for Financial Studies (CFS).
- Conesa, Juan Carlos & Krueger, Dirk & Kitao, Sagiri, 2006. "Taxing Capital? Not a Bad Idea After All!," CEPR Discussion Papers 5929, C.E.P.R. Discussion Papers.
- Juan Carlos Conesa & Sagiri Kitao & Dirk Krueger, 2007. "Taxing Capital? Not a Bad Idea After All!," NBER Working Papers 12880, National Bureau of Economic Research, Inc.
- Hommes, Cars H., 2006.
"Heterogeneous Agent Models in Economics and Finance,"
Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 23, pages 1109-1186,
Elsevier.
- Cars H. Hommes, 2005. "Heterogeneous Agent Models in Economics and Finance," Tinbergen Institute Discussion Papers 05-056/1, Tinbergen Institute.
- Paul De Grauwe, 2012. "Lectures on Behavioral Macroeconomics," Economics Books, Princeton University Press, edition 1, volume 1, number 9891.
- Mikhail Anufriev & Cars Hommes, 2012.
"Evolutionary Selection of Individual Expectations and Aggregate Outcomes in Asset Pricing Experiments,"
American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 35-64, November.
- Anufriev, M. & Hommes, C.H., 2011. "Evolutionary Selection of Individual Expectations and Aggregate Outcomes in Asset Pricing Experiments," CeNDEF Working Papers 11-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Bullard James, 1994.
"Learning Equilibria,"
Journal of Economic Theory, Elsevier, vol. 64(2), pages 468-485, December.
- James B. Bullard, 1991. "Learning equilibria," Working Papers 1991-004, Federal Reserve Bank of St. Louis.
- Tuinstra, Jan, 2003.
"Beliefs equilibria in an overlapping generations model,"
Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 145-164, February.
- Jan Tuinstra, 2001. "Beliefs Equilbria in an Overlapping Generations Model," CeNDEF Workshop Papers, January 2001 4B.4, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- William A. Brock & Cars H. Hommes, 2001.
"A Rational Route to Randomness,"
Chapters, in: W. D. Dechert (ed.), Growth Theory, Nonlinear Dynamics and Economic Modelling, chapter 16, pages 402-438,
Edward Elgar Publishing.
- William A. Brock & Cars H. Hommes, 1997. "A Rational Route to Randomness," Econometrica, Econometric Society, vol. 65(5), pages 1059-1096, September.
- Brock, W.A. & Hommes, C.H., 1995. "Rational Routes to Randomness," Working papers 9506, Wisconsin Madison - Social Systems.
- William A. Brock & Cars H. Hommes, 1995. "Rational Routes to Randomness," Working Papers 95-03-029, Santa Fe Institute.
- Brock, W.A. & Hommes, C.H., 1996. "A Rational Route to Randomness," Working papers 9530r, Wisconsin Madison - Social Systems.
- Jan Tuinstra & Florian Wagener, 2007.
"On learning equilibria,"
Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(3), pages 493-513, March.
- Tuinstra, J. & Wagener, F.O.O., 2000. "On learning equilibria," CeNDEF Working Papers 00-12, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Florian Wagener & Jan Tuinstra, 2004. "On Learning Equilibria," Computing in Economics and Finance 2004 217, Society for Computational Economics.
- Tuinstra, J. & Wagener, F.O.O., 2003. "On Learning Equilibria," CeNDEF Working Papers 03-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Klaus Adam, 2003.
"Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices,"
The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(4), pages 887-907.
- Adam, Klaus, 2003. "Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices," CFS Working Paper Series 2003/03, Center for Financial Studies (CFS).
- Heylen Freddy & Van de Kerckhove Renaat, 2013. "Employment by age, education, and economic growth: effects of fiscal policy composition in general equilibrium," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 49-103, October.
- Boris Cournède & Frédéric Gonand, 2006. "Restoring Fiscal Sustainability in the Euro Area: Raise Taxes or Curb Spending?," OECD Economics Department Working Papers 520, OECD Publishing.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Cavalli, F. & Chen, H.-J. & Li, M.-C. & Naimzada, A. & Pecora, N., 2023. "Heterogeneous expectations and equilibria selection in an evolutionary overlapping generations model," Journal of Mathematical Economics, Elsevier, vol. 104(C).
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Tiziana Assenza & Te Bao & Cars Hommes & Domenico Massaro, 2014.
"Experiments on Expectations in Macroeconomics and Finance,"
Research in Experimental Economics, in: Experiments in Macroeconomics, volume 17, pages 11-70,
Emerald Group Publishing Limited.
- Assenza, T. & Bao, T. & Massaro, D. & Hommes, C.H., 2014. "Experiments on Expectations in Macroeconomics and Finance," CeNDEF Working Papers 14-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Mikhail Anufriev & Cars Hommes, 2012.
"Evolutionary Selection of Individual Expectations and Aggregate Outcomes in Asset Pricing Experiments,"
American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 35-64, November.
- Anufriev, M. & Hommes, C.H., 2011. "Evolutionary Selection of Individual Expectations and Aggregate Outcomes in Asset Pricing Experiments," CeNDEF Working Papers 11-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Hommes, Cars, 2018. "Behavioral & experimental macroeconomics and policy analysis: a complex systems approach," Working Paper Series 2201, European Central Bank.
- Gerunov, Anton, 2014. "Критичен Преглед На Основните Подходи За Моделиране На Икономическите Очаквания [A Critical Review of Major Approaches for Modeling Economic Expectations]," MPRA Paper 68797, University Library of Munich, Germany.
- Goy, Gavin & Hommes, Cars & Mavromatis, Kostas, 2022. "Forward guidance and the role of central bank credibility under heterogeneous beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1240-1274.
- Hommes, Cars H., 2014.
"Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria,"
Review of Behavioral Economics, now publishers, vol. 1(1-2), pages 75-97, January.
- Hommes, C.H., 2013. "Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria," CeNDEF Working Papers 13-17, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Cars Hommes, 2013. "Behaviorally Rational Expectations and Almost Self-Fulfilling Equilibria," Tinbergen Institute Discussion Papers 13-204/II, Tinbergen Institute.
- Hommes, Cars & Kiseleva, Tatiana & Kuznetsov, Yuri & Verbic, Miroslav, 2012.
"Is More Memory In Evolutionary Selection (De)Stabilizing?,"
Macroeconomic Dynamics, Cambridge University Press, vol. 16(3), pages 335-357, June.
- Hommes, C.H. & Kiseleva, T. & Kuznetsov, Y. & Verbic, M., 2009. "Is more memory in evolutionary selection (de)stabilizing?," CeNDEF Working Papers 09-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Anufriev, Mikhail & Bao, Te & Tuinstra, Jan, 2016.
"Microfoundations for switching behavior in heterogeneous agent models: An experiment,"
Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 74-99.
- Anufriev, M. & Bao, T. & Tuinstra, J., 2015. "Microfoundations for Switching Behavior in Heterogeneous Agent Models: An Experiment," CeNDEF Working Papers 15-09, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Mikhail Anufriev & Te Bao & Jan Tuinstra, 2015. "Microfoundations for Switching Behavior in Heterogeneous Agent Models: An Experiment," Working Paper Series 31, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
- Hommes, Cars & Massaro, Domenico & Weber, Matthias, 2019.
"Monetary policy under behavioral expectations: Theory and experiment,"
European Economic Review, Elsevier, vol. 118(C), pages 193-212.
- Cars Hommes & Domenico Massaro & Matthias Weber, 2015. "Monetary Policy under Behavioral Expectations: Theory and Experiment," Tinbergen Institute Discussion Papers 15-087/II, Tinbergen Institute.
- Cars Hommes & Domenico Massaro & Matthias Weber, 2017. "Monetary Policy under Behavioral Expectations: Theory and Experiment," Bank of Lithuania Working Paper Series 42, Bank of Lithuania.
- Mikhail Anufriev & Cars Hommes & Tomasz Makarewicz, 2019.
"Simple Forecasting Heuristics that Make us Smart: Evidence from Different Market Experiments,"
Journal of the European Economic Association, European Economic Association, vol. 17(5), pages 1538-1584.
- Anufriev, M. & Hommes, C.H. & Makarewicz, T.A., 2015. "Simple Forecasting Heuristics that Make us Smart: Evidence from Different Market Experiments," CeNDEF Working Papers 15-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Mikhail Anufriev & Cars Hommes & Tomasz Makarewicz, 2015. "Simple Forecasting Heuristics that Make us Smart: Evidence from Different Market Experiments," Working Paper Series 29, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
- Orlando Gomes, 2010. "Ordinary Least Squares Learning And Nonlinearities In Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 24(1), pages 52-84, February.
- Cars H. Hommes, 2009.
"Bounded Rationality and Learning in Complex Markets,"
Chapters, in: J. Barkley Rosser Jr. (ed.), Handbook of Research on Complexity, chapter 5,
Edward Elgar Publishing.
- Hommes, C.H., 2007. "Bounded Rationality and Learning in Complex Markets," CeNDEF Working Papers 07-01, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Gavin Goy & Cars Homme & Kostas Mavromatis, 2018. "Forward Guidance and the Role of Central Bank Credibility," DNB Working Papers 614, Netherlands Central Bank, Research Department.
- Adriana Cornea-Madeira & Cars Hommes & Domenico Massaro, 2019.
"Behavioral Heterogeneity in U.S. Inflation Dynamics,"
Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 288-300, April.
- Cornea, A. & Hommes, C.H. & Massaro, D., 2012. "Behavioral Heterogeneity in U.S. Inflation Dynamics," CeNDEF Working Papers 12-03, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Adriana Cornea & Cars Hommes & Domenico Massaro, 2013. "Behavioral Heterogeneity in U.S. Inflation Dynamics," Tinbergen Institute Discussion Papers 13-015/II, Tinbergen Institute.
- Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
- Cavalli, F. & Chen, H.-J. & Li, M.-C. & Naimzada, A. & Pecora, N., 2023. "Heterogeneous expectations and equilibria selection in an evolutionary overlapping generations model," Journal of Mathematical Economics, Elsevier, vol. 104(C).
- Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
- Sarah Mignot & Fabio Tramontana & Frank Westerhoff, 2021.
"Speculative asset price dynamics and wealth taxes,"
Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 641-667, December.
- Mignot, Sarah & Tramontana, Fabio & Westerhoff, Frank H., 2021. "Speculative asset price dynamics and wealth taxes," BERG Working Paper Series 169, Bamberg University, Bamberg Economic Research Group.
- Anufriev, Mikhail & Assenza, Tiziana & Hommes, Cars & Massaro, Domenico, 2013.
"Interest Rate Rules And Macroeconomic Stability Under Heterogeneous Expectations,"
Macroeconomic Dynamics, Cambridge University Press, vol. 17(8), pages 1574-1604, December.
- Mikhail Anufriev & Tiziana Assenza & Cars Hommes & Domenico Massaro, 0000. "Interest Rate Rules and Macroeconomic Stability under Heterogeneous Expectations," Tinbergen Institute Discussion Papers 09-040/1, Tinbergen Institute.
- Xue-Zhong He & Youwei Li, 2017.
"The adaptiveness in stock markets: testing the stylized facts in the DAX 30,"
Journal of Evolutionary Economics, Springer, vol. 27(5), pages 1071-1094, November.
- Xue-Zhong He & Youwei Li, 2015. "The Adaptiveness in Stock Markets: Testing the Stylized Facts in the Dax 30," Research Paper Series 364, Quantitative Finance Research Centre, University of Technology, Sydney.
More about this item
Keywords
Heuristic switching; Heterogeneous agents; Fiscal policy; Transitional dynamics; Overlapping Generations;All these keywords.
JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:155:y:2018:i:c:p:349-364. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.