Found 2 article(s) for author 'Behavioral Macroeconomics'

Expectations and investment

Expectations and investment. Andrei Shleifer, May 2016, Paper. “Using micro data from the Duke University quarterly survey of Chief Financial Officers, we show that corporate investment plans as well as actual investment are well explained by CFOs’ expectations of earnings growth. The information in expectations data is not subsumed by traditional variables, such as Tobin’s Q or discount rates. We also show that errors in CFO expectations of earnings growth are predictable from past earnings and other data, pointing to the extrapolative structure of expectations and suggesting that expectations may not be rational. This evidence, like earlier findings in finance, points to the usefulness of data on actual expectations for understanding economic behaviour.Link 

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Behavioral Economics and Public Policy: A Pragmatic Perspective

Behavioral Economics and Public Policy: A Pragmatic Perspective. Raj Chetty, May 2015, Paper. “The debate about behavioral economics–the incorporation of insights from psychology into economics–is often framed as a question about the foundational assumptions of economic models. This paper presents a more pragmatic perspective on behavioral economics that focuses on its value for improving empirical predictions and policy decisions. I discuss three ways in which behavioral economics can contribute to public policy: by offering new policy tools, improving predictions about the effects of existing policies, and generating new welfare implications.” Link

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