Purpose - The goal of this paper is twofold. First, to examine the role of expectations in shaping agents' behaviour within an extended time frame which incorporates a prolonged harsh downturn of economic activity. Therefore, the authors allow for an indirect impact of economy-wide expectations...

We employ senior bank loan officers' responses regarding actual and expected loan demand from enterprises linking successive surveys to determine the dominant expectation formation mechanism that best describes European senior bank loan officers' expectations. Our findings suggest that the...