Arbeitspapier
Modeling consumer confidence and its role for expectation formation: A horse race
The notion of bounded rationality has received a considerable attention in the midst of debate over the usefulness of various macroeconomic models. In this paper we empirically seek to analyze the baseline New-Keynesian model with heterogeneous agents who may adopt various heuristics used to forecast future movements in consumption. Agents could exhibit an optimistic or pessimistic view or act as fundamentalists or chartists when forming expectations on future consumption based on discrete choice. Our empirical results via the Simulated Method of Moment Approach show that consumer confidence in the US is heavily grounded on consumers' emotional state (with respect to optimism and pessimism), while for the Euro Area it is most likely technical in nature (with respect to fundamentalists and chartists). These heuristics lead to an equivalent or even better fit to the data compared to the hybrid version of the baseline New-Keynesian model. We argue that this study could open up new possibilities for estimating bounded rationality models and policy analysis.
- Sprache
-
Englisch
- Erschienen in
-
Series: Economics Working Paper ; No. 2017-04
- Klassifikation
-
Wirtschaft
Forecasting Models; Simulation Methods
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Business Fluctuations; Cycles
- Thema
-
Bounded Rationality
Consumer Confidence
New-Keynesian Model
Forecast Heuristics
Simulated Method of Moments
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Jang, Tae-Seok
Sacht, Stephen
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel University, Department of Economics
- (wo)
-
Kiel
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Jang, Tae-Seok
- Sacht, Stephen
- Kiel University, Department of Economics
Entstanden
- 2017
Ähnliche Objekte (12)
Forecast heuristics, consumer expectations, and new-Keynesian macroeconomics: A horse race
Consumer Confidence and Consumption in Sweden
Social media sentiment and consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Consumer confidence and lasting effect of demonetisation
Expenditure, confidence, and Uncertainty: Identifying shocks to consumer confidence using daily data
Do consumer confidence indexes help forecast consumer spending in real time?
Do Consumer Confidence Indexes Help Forecast Consumer Spending in Real Time?
Sustainable marketing strategies: Creating business value by meeting consumer expectation
Monetary policy under imperfect information and consumer confidence
Consumer confidence indicators and economic fluctuations in Nigeria
Forecast heuristics, consumer expectations, and new-Keynesian macroeconomics: A horse race
Consumer Confidence and Consumption in Sweden
Social media sentiment and consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Consumer confidence and lasting effect of demonetisation
Expenditure, confidence, and Uncertainty: Identifying shocks to consumer confidence using daily data
Do consumer confidence indexes help forecast consumer spending in real time?
Do Consumer Confidence Indexes Help Forecast Consumer Spending in Real Time?
Sustainable marketing strategies: Creating business value by meeting consumer expectation
Monetary policy under imperfect information and consumer confidence
Consumer confidence indicators and economic fluctuations in Nigeria
Forecast heuristics, consumer expectations, and new-Keynesian macroeconomics: A horse race
Consumer Confidence and Consumption in Sweden
Social media sentiment and consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Confidence via correction: The effect of judgment correction on consumer confidence
Consumer confidence and lasting effect of demonetisation
Expenditure, confidence, and Uncertainty: Identifying shocks to consumer confidence using daily data
Do consumer confidence indexes help forecast consumer spending in real time?
Do Consumer Confidence Indexes Help Forecast Consumer Spending in Real Time?
Sustainable marketing strategies: Creating business value by meeting consumer expectation
Monetary policy under imperfect information and consumer confidence