Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature, which is in sharp contrast to the implausibly lo...

Using a unique dataset of survey expectations, this paper examines the extent to which the classical fundamentalist – chartist dichotomy is valid for the foreign exchange market. By applying a recursive selection algorithm 1) respondents are classified into the two groups, and 2) the forecasting models are endogenously determined within the groups. We find that the largest part of the variation...

The scope of this article is to discuss the dynamics of formatting customer expectations in financial services-under two models for assessing cumulative learning in customer expectations. The first model is a classical Bayesian one, the second model is an entirely new application of the Repetitive Stochastic Guesstimation (RSG) algorithm. The traditional assumption of postulating that empirical...

Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values ...

Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values ...

We explain why family-centered noneconomic goals and bounded rationality decrease the willingness and ability of smalland medium-sized family firms to hire and provide competitive compensation to nonfamily managers even in a labor market composed of stewards rather than agents. Family-centered noneconomic goals attenuate the ability to attract high-quality, nonfamily managers by promoting infer...

Branding has a role to play in integrating efforts to promote tourism. The positioning strategy for the Tourism Brand Ireland initiative is based on the core values of friendly people and unspoiled beautiful scenery. Images on the main national tourism promotion websites are examined in the context of the expectations created for visitors to Ireland. As the nature of Ireland changes with increa...

The paper studies insurance with moral hazard in a system of contingent-claims markets. Insurance buyers are modelled as Cournot monopolists or oligopolists. The other agents condition their expectations on market prices, as in models of rational-expectations equilibrium with asymmetric information. Thereby they correctly anticipate accident probabilities corresponding to effort incentives indu...

This paper analyzes monetary stabilization in a structurally unstable economy. The economy has multiple stationary states, differing in credit market conditions and economic activity. Under certain conditions two monetary stationary states are stable and self—fulfilling deflationary crises can occur. The model implies that adjusting long— run monetary conditions is insufficient to coordinate th...