We investigate the extent to which misperceptions about the economy can become self-reinforcing and thereby contribute to time-varying macroeconomic dynamics. To do so, we build a New Keynesian model with long-horizon expectations and dynamic predictor selection. Because agents solve...

In this paper, we compare two approaches to modelling behaviour under non-rational expectations in a benchmark New Keynesian model. The ‘Euler equation' approach modifies the equations derived under the assumption of rational expectations by replacing the rational expectations operator with an...

The dominant justification for intellectual property rights at least in the West and international treaties is utilitarian, and more precisely based on the Chicago School of Law and Economics (first section). However, this school of thought is both flawed and ideological (second section). Basing...