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Quantifying Confidence / George-Marios Angeletos, Fabrice Collard, Harris Dellas.
- Format:
- Book
- Author/Creator:
- Angeletos, George-Marios.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20807.
- NBER working paper series no. w20807
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- We develop a tractable method for augmenting macroeconomic models with autonomous variation in higher-order beliefs. We use this to accommodate a certain type of waves of optimism and pessimism that can be interpreted as the product of frictional coordination and, unlike the one featured in the news literature, regards the short-term economic outlook rather than the medium- to long-run prospects. We show that this enrichment provides a parsimonious explanation of salient features of the data; it accounts for a significant fraction of the business-cycle volatility in estimated models that allow for various competing structural shocks; and it captures a type of fluctuations that have a Keynesian flavor but do not rely on nominal rigidities.
- Notes:
- Print version record
- December 2014.
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