Booms and busts in economic activity: A behavioral explanation

Journal of Economic Behavior and Organization

Volumn 83, Issue 3, 2012, Pages 484-501

  De Grauwe, Paul ^a  

^a UNIVERSITY OF LEUVEN   (Belgium)

Author keywords

Animal spirits; Heuristics; Imperfect information; Non normality

Indexed keywords

EID: 84858715698     PISSN: 01672681     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jebo.2012.02.013     Document Type: Article

References (26)

1. Akerlof, G., Shiller, R., 2009. Animal Spirits. How Human Psychology Drives the Economy and Why It Matters for Global Capitalism. Princeton University Press, 230
2. Anderson, S., de Palma, A., Thisse, J.-F. 1992. Discrete Choice Theory of Product Differentiation. MIT Press, Cambridge, MA.
3. Branch, W., Evans, G., 2006. Intrinsic heterogeneity in expectation formation. Journal of Economic Theory 127, 264-295.
4. Branch, W., Evans, G., 2009. Monetary Policy with Heterogeneous Expectations, mimeo. Stanford University.
5. Brazier, A., Harrison, R., King, M., Yates, T, 2006. The Danger of Inflating Expectations of Macroeconomic Stability: Heuristic Switching in an Overlapping Generations Monetary Model. Working Paper No. 303. Bank of England.
6. Brock, W., Hommes, C., 1997. A rational route to randomness. Econometrica 65, 1059-1095.
7. Clarida, R., Gali, J., Gertler, M., 1999. The science of monetary policy, a new Keynesian perspective. Journal of Economic Literature 37, 1661-1707.
8. De Grauwe, P., Grimaldi, M., 2006. The Exchange Rate in a Behavioural Finance Framework. Princeton University Press.
9. Delli Gatti, D., Di Guilmi, C., Gaffeo, E., Giuloni, G., Gallegati, M., Palestrini, A., 2005. A new approach to business fluctuations: heterogenous interacting agents, scaling laws and financial fragility. Journal of Economic Behavior and Organization 56, 489-512.
10. Evans, G., Honkapohja, S., 2001. Learning and Expectations in Macroeconomics. Princeton University Press, 421pp.
11. Fagiolo, G., Napoletano, M., Roventini, A., 2008. Are output growth rate distributions fat-tailed: evidence for OECD-countries. Journal of Applied Econometrics 23, 639-669.
12. Fagiolo, G., Napoletano, M., Piazza, M., Roventini, A., 2009. Detrending and the distributional properties of U.S. output time series. Economics Bulletin 29, 4.
13. Farmer, Roger, E.A., 2006. Animal spirits. Palgrave Dictionary of Economics.
14. Galí, J., 2008. Monetary Policy Inflation and the Business Cycle. Princeton University Press, 203pp.
15. Gaspar, V., Smets, F., Vestin, D., 2006. Adaptive Learning, Persistence and Optimal Monetary Policy. Working Paper Series No. 644. European Central Bank.
16. Gigerenzer, G., Todd, P.M., 1999. Simple Heuristics that Make us Smart. Oxford University Press, New York.
17. Hayek, F., 1945. The use of knowledge in society. American Economic Review XXXV (4), 519-530.
18. Keynes, J.M., 1936. The General Theory of Employment Interest and Money. MacMillan and Co.
19. Kirman, A., 1993. Ants, rationality and recruitment. Quarterly Journal of Economics 108, 137-156.
20. Milani, F., 2007. Learning and Time-Varying Macroeconomic Volatility, mimeo. University of California, Irvine.
21. Orphanides, A., Williams, J., 2004. Robust Monetary Policy with Imperfect Information. Board of Governors of the Federal Reserve System.
22. Sargent, T., 1993. Bounded Rationality in Macroeconomics. Oxford University Press.
23. Smets, F., Wouters, R., 2003. An estimated dynamic stochastic general equilibrium model. Journal of the European Economic Association 1, 1123-1175.
24. Svensson, L., 1997. Inflation forecast targeting: implementing and monitoring inflation targets. European Economic Review 41, 111-146.
25. Woodford, M., 2003. Interest and Prices: Foundations of a Theory of Monetary Policy. Princeton University Press.
26. Woodford, M., 2009. Convergence in macroeconomics: elements of the new synthesis. American Economic Journal: Macroeconomics 1 (1), 267-297.