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Full-Text Articles in Macroeconomics
An Experimental Analysis Of Adaptive Learning In A Multi-Subject Economy, David Martin
An Experimental Analysis Of Adaptive Learning In A Multi-Subject Economy, David Martin
Business and Economics Honors Papers
The rational expectations hypothesis (REH) has long served as a foundation in macroeconomic laws of motion. However, the assumptions of REH are likely too powerful to be representative of economic actors. This research evaluates adaptive learning, a developing alternative to rational expectations, using a multi-agent macroeconomic prediction “game.” Data was gathered from a group of students, each predicting the outcome of a single economy over time. Each agent was asked to forecast output (GDP) and inflation in each period based on historic levels of output, inflation, and interest rates. These data were then analyzed under various theoretical models of adaptive …
Experimental Evidence For Heterogeneous Expectations In A Simple New Keynesian Framework, Atticus David Holm Graven
Experimental Evidence For Heterogeneous Expectations In A Simple New Keynesian Framework, Atticus David Holm Graven
Business and Economics Honors Papers
This paper is a two-dimensional analysis of agent behavior in a standard New Keynesian (NK) Macroeconomic model. On the dimension of pure mathematics, we analyze the parameters of the NK model and of possible prediction rules. On the other dimension we continue a practice of empirical study of heterogeneous expectations with an experiment. The experiment will ask participants to make predictions of future output and inflation. Their responses will create a data-set upon which analysis will be performed to illuminate and corroborate current theories of economic decision making. The literature has shown that most agents' forecasting rules can be modeled …