Project CEMAPRE internal
| Title | Endogenous switching of expectations and the impact of policy changes - continuation |
| Participants | Otilia Boldea, Adriana Cornea-Madeira (Principal Investigator), Alastair Hall, Joao Madeira |
| Summary | It is common in economic modelling to assume all agents have the same expectations (rational expectations or adaptative expectations) or that different types of agents use different rules but cannot change their type (an agent with adaptative expectations cannot change to become forward-looking). We are working on several projects in which we allow agents to switch endogenously between different expectation rules based on their previous forecast performance. We also study the effect of different policy changes on the economy using impulse response functions. |