Experiments in Macroeconomics

Tiziana Assenza, Domenico Massaro, Cars Hommes, Te Bao

Research output: Chapter in Book/Report/Conference proceedingChapter

33 Citations (Scopus)

Abstract

Expectations play a crucial role in finance, macroeconomics, monetary economics, and fiscal policy. In the last decade a rapidly increasing number of laboratory experiments have been performed to study individual expectation formation, the interactions of individual forecasting rules, and the aggregate macro behavior they co-create. The aim of this article is to provide a comprehensive literature survey on laboratory experiments on expectations in macroeconomics and finance. In particular, we discuss the extent to which expectations are rational or may be described by simple forecasting heuristics, at the individual as well as the aggregate level.
Original languageEnglish
Title of host publicationExperiments in Macroeconomics
EditorsJ Duffy
Pages11-70
Number of pages60
DOIs
Publication statusPublished - 2014

Keywords

  • Expectation feedback, self-fulfilling beliefs, heuristic switching model, experimental economics

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