Questions tagged [expectations]

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Experiments on expectations formation

I was reading about the debate between rational expectations and adaptive expectations in some intermediate macro notes. One of the arguments given to discard the adaptive expectations hypothesis drew ...
Ishan Kashyap Hazarika's user avatar
1 vote
1 answer
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why is the slow down in economic growth creating inflation

Context: Currently, many central banks and authorities are implementing monetary policies to do monetary tightening in response to current inflation and expectations of even higher inflation in the ...
eddie's user avatar
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1 answer
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Joint distribution from differential equations

I have the following problem - Z is a random variable which can take any real value in the range [0,1] a and b are independent variables drawn from uniform distribution in the interval [0,1]. Z is a ...
Elina Gilbert's user avatar
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0 answers
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Hybrid New Keynesian philips curve model - inflation expectation

I am doing research on the HNKPC model following Gali and Gertler 1999 as per the picture. I do not understand how to get the inflation expectations. Could I get more insight on how to perform this ...
Vishali's user avatar
1 vote
0 answers
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Impact of contractionary monetary policy and IS-LM curve shifts

Using the IS-LM diagram, show the impact of a contractionary monetary policy for a country when: (a) it does not affect expectations about future interest rates and output (b) it affects expectations ...
eddie's user avatar
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Solution Check on Problem about expected inflation and Philips Curve relation (from Blanchard's Macroeconomics book)

Consider a country with two political parties, Democrats and Republicans. Democrats care more about unemployment than Republicans, and Republicans care more about inflation than Democrats. When ...
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1 answer
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Why is return same as interest rate (yield) in the expectations theory?

My book (Financial Markets and Institutions, Mishkin et al.) treats returns and interest rates as the same thing while explaining the expectations theory in Chapter 5. However, in the previous chapter ...
reasonStore's user avatar
1 vote
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Does the ECB provide a daily Inflation Expectations series for the Euro area?

I've been searching for market indicators for Inflation Expectations. The FED provides at least two, one of those being the T5YIFR from the FRED database. Regarding the ECB I couldn't find anything... ...
An old man in the sea.'s user avatar
1 vote
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Determinants of inflation expectation

What are the most important factors that determine inflation expectation in a country, both based on theoretical models and on empirical evidence? If an answer is too lengthy for the site, reference ...
Ishan Kashyap Hazarika's user avatar
3 votes
1 answer
34 views

Market Measures for Inflation Expectations for Euro zone

If I were to use a market measure for inflation expectations for the USA, I would look at the differential of yields between the conventional and inflation-indexed Treasuries. However, in the Euro ...
An old man in the sea.'s user avatar
6 votes
0 answers
111 views

Solving Rational Expectation Models Linear vs. Nonlinear

Since I am coding some linear New Keynesian models in python and solving them under rational expectations (using the method of undetermined coefficients/linear time iteration), I was wondering whether ...
Suttungr's user avatar
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1 answer
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Expected value of order statistics for uniform distribution

I have $X$ ~ $U(0,1)$ interval. Let n=2, i.e. $X_1 < X_2$ I have to calculate the expected value of ${X_2}^{m/(1-m)}$. Where, $0≤m≤1$ I want to confirm if I have calculated it correctly? $$\int_0^1 ...
Elina Gilbert's user avatar
-1 votes
1 answer
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Why is there no room for expectations if the economy is always in equilibrium?

Joan Robinson (1972): If the economy is always in equilibrium anyway, where is the room for expectations?
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