Animal spirits and monetary policy

Arbeitspapier

We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (Animal Spirits”) that are generated by the correlation of biased beliefs. We contrast the dynamics of this model with a stylized DSGE-version of the model and we study the implications for monetary policies. One of our main results is that strict inflation targeting is suboptimal because it gives more scope for waves of optimism and pessimism to emerge thereby destabilizing output and inflation.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 2418

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 ; Allgemeines Gleichgewicht ; Sunspot ; Geldpolitik ; Inflation Targeting ; 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): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/26463
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ