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prior into a posterior at each date and gives the policy maker an incentive to experiment. For a model calibrated to U … outcomes from two Bellman equations, the first of which embodies a `experiment and learn' setup, the second of which embodies a … `don't experiment, do learn' view. We interpret the second as an example of an `anticipated utility' model and study how …
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Using a novel dataset that integrates inflation expectations with information on social network connections, we show that inflation expectations within one's social network have a positive, causal relationship with individual inflation expectations. This relationship is stronger for groups that...
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This paper investigates how social network and conformity dynamics shape the stability of inflation expectations and the dissemination of economic narratives. Using an agent-based macroeconomic simulation, I integrate a heuristic switching framework with an opinion dynamics mechanism to examine...
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We provide a new explanation for why central banks have become transparent over the last three decades. We apply recently developed social interaction panel regression models for the observational data, which allow the identification of peer effects. The identification is based on variations in...
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