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Sentiments and Aggregate Demand Fluctuations / Jess Benhabib, Pengfei Wang, Yi Wen.
- Format:
- Book
- Author/Creator:
- Benhabib, Jess.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18413.
- NBER working paper series no. w18413
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2012.
- Summary:
- We formalize the Keynesian insight that aggregate demand driven by sentiments can generate output fluctuations under rational expectations. When production decisions must be made under imperfect information about demand, optimal decisions based on sentiments can generate stochastic self-fulfilling rational expectations equilibria in standard economies without persistent informational frictions, externalities, non-convexities or strategic complementarities in production. The models we consider are deliberately simple, but could serve as benchmarks for more complicated equilibrium models with additional features.
- Notes:
- Print version record
- September 2012.
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