Research projects

Project CEMAPRE internal

TitleEndogenous switching of expectations and the impact of policy changes - continuation 2025
ParticipantsOtilia Boldea, Adriana Cornea-Madeira (Principal Investigator), Alastair Hall, Joao Madeira
SummaryIt 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 a project in which we allow agents to switch endogenously
between different expectation rules for wage growth based on their previous forecast performance. We
also study the effect of different policy changes on the economy using impulse response functions.