Booms and busts: New Keynesian and behavioral explanations

Arbeitspapier

Capitalism is characterized by booms and busts. Periods of strong growth in output alternate with periods of declines in economic growth. Every macro-economic theory should attempt to explain these endemic business cycle movements. In this paper I present two paradigms that attempt to explain these booms and busts. One is the DSGE-paradigm in which agents have unlimited cognitive abilities. The other paradigm is a behavioural one in which agents are assumed to have limited cognitive abilities. These two types of models produce a radically different macroeconomic dynamics. I analyze these differences. I also study the different policy implications of these two paradigms.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 3293

Klassifikation und Themen

• Klassifikation: Wirtschaft ; General Aggregative Models: General ; Business Fluctuations; Cycles ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Thema: DSGE-model ; imperfect information ; heuristics ; animal spirits ; Konjunkturtheorie ; Dynamisches Gleichgewicht ; Ungleichgewichtstheorie ; Sunspot ; Verhaltensökonomik ; Unvollkommene Information ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): De Grauwe, Paul
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/46377
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ