Toggle Main Menu Toggle Search

Open Access padlockePrints

Households' Forming Subjective Expectations Using Perceived News: Do Shocks to 'Good' News Matter More Than 'Bad' News?

Lookup NU author(s): Professor Atanu Ghoshray

Downloads

Full text for this publication is not currently held within this repository. Alternative links are provided below where available.


Abstract

The present paper examines the microfoundations of how households form subjective expectations about the macroeconomy using a novel survey-based data set. In particular, we are interested in the role of perceived news. The paper outlines a model where households may give unequal importance (or weights) to ‘good’ and ‘bad’ news. We also consider whether the relationship is state-varying and has any structural changes. The ensuing empirical investigation uses time-varying smooth transition autoregressive models. We find that weights given to the news are state-varying, with little, or no, weight given to bad news. There is also a clear structural change in the relationship after September 2001.


Publication metadata

Author(s): Easaw JZ, Ghoshray A, Heravi S

Publication type: Article

Publication status: Published

Journal: The Manchester School

Year: 2014

Volume: 82

Issue: 1

Pages: 1-16

Print publication date: 16/01/2014

Online publication date: 01/11/2012

Acceptance date: 05/07/2012

ISSN (print): 1463-6786

ISSN (electronic): 1467-9957

Publisher: Wiley-Blackwell Publishing Ltd.

URL: http://dx.doi.org/10.1111/j.1467-9957.2012.02333.x

DOI: 10.1111/j.1467-9957.2012.02333.x


Altmetrics

Altmetrics provided by Altmetric


Actions

Find at Newcastle University icon    Link to this publication


Share