individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …

individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …

predict exchange rates and to advocate floating exchange rates, economists unwittingly employ nominalist heuristics. Second …, nominalist heuristics have influenced actual exchange rates through the centuries, and this finding is replicated in the … laboratory. Third, nominalist heuristics are incompatible with expected utility theory which excludes the evaluation stage, and …

rationality. Economic agents form their expectations using heuristics - they choose between a few simple rules based on their past …