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Do firms learn to forecast future business conditions after major structural changes to the economy? How long does it take? We exploit German Reunification as a natural experiment, where firms in the East are treated with ignorance about the distribution of market states, to test a Bayesian...
Persistent link: https://www.econbiz.de/10012857100
We develop a model of firm learning in volatile markets with noisy signals and test its predictions using historical German data. Firms' forecasts improve with age. We exploit German Reunification as a natural experiment where firms in the East are treated with ignorance about the distribution...
Persistent link: https://www.econbiz.de/10011580632
Persistent link: https://www.econbiz.de/10012116988