Note that the model's inherent stochasticity, together with the real-time learning behavior of agents, imparts considerable uncertainty regarding the asymptotic outcome: all simulations result in an initial contraction of the span of beliefs, but what happens next depends on the interaction of stochasticity, expectational
feedback, and learning behavior.
In addition to the preliminary testing of data stationarity, recent literature on REH testing has advocated the use of cointegration testing to examine the presence of co-movement in the survey expectational
Given this general form with C [not equal to] 0, an MSV rational expectational
equilibrium takes the following form: (29)
A morale-benefits lens has implications as well for the expectational
calculus in takings and due process.
If confidence and expectational
factors do not account for the puzzle, what does?
On the theoretical side, Bertola and Drazen (1993) derive predictions in line with the expectational
view based on a simple stochastic model of government spending.
(6) In case [E.sub.t] stands for the mathematical expeditions, one could obtain a rational expectational
To the extent a disproportionate number of exceptions occurs within a given data set, it is natural to assume the fault lies with the expectational
The mean error (ME) gives the average expectational
error and provides evidence of any systematic over- or under-prediction of inflation in the sample.
By exploiting stochastic detrending, the linearized Euler equation (A1.6) can be written as a second-order expectational
stochastic difference equation in demeaned household consumption growth
Potential period one buyers will rationally expect the firm to maximize (4), which places an expectational
constraint on the firm.
Data and Portfolio Performance", Journal of Finance, Vol.