Toggle Main Menu Toggle Search

Open Access padlockePrints

The Newcastle University research output collection, currently available on ePrints, will shortly be moving to a new open repository platform, Figshare. To prepare for the data migration we have paused adding new content to ePrints, and will resume once the new repository is launched. During this time you will continue to have access to ePrints (but no new content will appear). We will share updates here when available.

'The Island man's behavior': some microfoundations of how households form macroeconomic expectations

Lookup NU author(s): Professor Atanu GhoshrayORCiD

Downloads

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

Abstract

This paper investigates how households form expectations about the macroeconomy. We outline a theoretical model whereby households form subjective expectations about the aggregate economy based on personal finance expectations as a reference point. The speed of updating the expectations reflects the households' willingness to incur transactions costs and may be state-varying. This forms the basis of the empirical analysis using survey-based US household data. The results indicate that while household expectations of the aggregate economy adjust to personal finance expectations, it is slow and non-linear, thereby, explaining the persistence of relative effects in the context of the Lucas-Phelps Island model.

Publication metadata

Author(s): Easaw JZ, Ghoshray A

Publication type: Article

Publication status: Published

Journal: The Manchester School

Year: 2011

Volume: 79

Issue: 4

Pages: 789-810

Print publication date: 21/06/2011

ISSN (print): 1463-6786

ISSN (electronic): 1467-9957

Publisher: Wiley-Blackwell Publishing Ltd.

URL: http://dx.doi.org/10.1111/j.1467-9957.2010.02174.x

DOI: 10.1111/j.1467-9957.2010.02174.x

Altmetrics

Altmetrics provided by Altmetric

Share