What can explain the large changes in aggregate demand that occur absence of any seemingly corresponding shock to underlying state variables economy? We show macroeconomic volatility arise from dispersions beliefs among agents. These give rise bets and other trades speculative assets. Such pseudo-wealth, wealth individuals believe they have on basis expectations returns these gambles. In aggreg...

We present an overview of recent research applying ideas of statistical physics to try to better understand puzzles regarding economic fluctuations. One of these puzzles is how to describe outliers, phenomena that lie outside of patterns of statistical regularity. We review evidence consistent with the possibility that such outliers may not exist. This possibility is supported by recent analysi...

I ran’s economy is suffering from sharp and persistent economic shocks and agriculture plays an undeniable role in its economic growth and development. The aim of this paper is to study the relative contributions of various macroeconomic shocks to generating fluctuations in Iran’s agriculture sector. To do so, a Dynamic Stochastic General Equilibrium (DSGE) model, emphasizing on the ...