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Optimism Bias? The Elasticity Puzzle in International Economics Revisited

Corbo, Vesna - 2012

The elasticity of substitution between domestic and imported goods is a central parameter in macroeconomic models, but after decades of empirical studies there is no consensus on its magnitude. Earlier literature using time series arrives at low values, while more recent studies using...

Persistent link: https://www.econbiz.de/10013100338

The Political Economy of Fiscal Transparency and Independent Fiscal Councils

Beetsma, Roel - 2017

IFC as the debt bias would fall. However, when other considerations eclipse competence and give the incumbent a strong … electoral advantage or disadvantage, setting up an IFC may be counterproductive as the debt bias would increase. If the … bias if voters care sufficiently about policymakers' competence; (ii) not all political environments are conducive to the …

Persistent link: https://www.econbiz.de/10012949941

New Evidence on Elementary Index Bias

Gábor-Tóth, Eniko - 2014

compared with the Fisher Ideal index to quantify elementary index bias. Across product categories, mean levels of annual … elementary index bias vary between -0.53 percentage points and 0.55 percentage points depending on the index, while the standard … average effect of elementary index bias on national inflation ranges from -0.45 to 0.45 percentage points depending on the …

Persistent link: https://www.econbiz.de/10013040610

Financial returns, sentiment and market volatility: A dynamic assessment

Borgioli, Stefano; Gallo, Giampiero M.; Ongari, Chiara - 2024

In 1936, John Maynard Keynes proposed that emotions and instincts are pivotal in decision-making, particularly for investors. Both positive and negative moods can influence judgments and decisions, extending to economic and financial choices. Intuitions, emotional states, and biases...

Persistent link: https://www.econbiz.de/10015199487

More than a feeling: Confidence, uncertainty and macroeconomic fluctuations

Nowzohour, Laura; Stracca, Livio - 2017

Economists, observers and policy-makers often emphasize the role of sentiment as a potential driver of the business cycle. In this paper we provide three contributions to this debate. First, we critically survey the existing literature on sentiment (considering both confidence and uncertainty)...

Persistent link: https://www.econbiz.de/10011804415

Financial cycles under diagnostic beliefs

Camous, Antoine; Van der Ghote, Alejandro - 2022

Swift changes in investors' sentiment, such as the one triggered by COVID-19 global outbreak in March 2020, lead to financial tensions and asset price volatility. We study the interactions of behavioral and financial frictions in an environment with endoge- nous risk-taking and capital...

Persistent link: https://www.econbiz.de/10013367989

Average inflation targeting and the interest rate lower bound

Budianto, Flora; Nakata, Taisuke; Schmidt, Sebastian - 2020

Assigning a discretionary central bank a mandate to stabilize an average in ation rate

Persistent link: https://www.econbiz.de/10012422056

Culture and portfolios: Trust, precautionary savings and home ownership

Fleck, Johannes; Monninger, Adrian - 2020

This paper shows that individual beliefs on the effectiveness of formal and informal sources of risk sharing determine financial precautionary behavior. We present empirical evidence demonstrating that higher trust in public insurance systems reduces net liquid wealth while higher trust in...

Persistent link: https://www.econbiz.de/10012422119

The COVID-19 consumption game-changer: Evidence from a large-scale multi-country survey

Hodbod, Alexander; Hommes, Cars H.; Huber, Stefanie J.; … - 2021

Prospective economic developments depend on the behavior of consumer spending. A key question is whether private expenditures recover once social distancing restrictions are lifted or whether the COVID-19 crisis has a sustained impact on consumer confidence, preferences, and, hence, spending....

Persistent link: https://www.econbiz.de/10012661627

Firm expectations and economic activity

Enders, Zeno; Hünnekes, Franziska; Müller, Gernot J. - 2021

We assess how firm expectations about future production impact current production and pricing decisions. Our analysis is based on a large survey of firms in the German manufacturing sector. To identify the causal effect of expectations, we rely on the timing of survey responses and match firms...

Persistent link: https://www.econbiz.de/10012819035