Survey Data and Subjective Beliefs in Business Cycle Models

• 成果类型: Article
• 署名作者: Bhandari, Anmol; Borovicka, Jaroslav; Ho, Paul
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; National Bureau of Economic Research; New York University; Federal Reserve System - USA; Federal Reserve Bank - Richmond
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdae054
• 发表日期: 2025
• 页码: 1375-1437
• 关键词: Macroeconomic expectations; uncertainty shocks; inflation-expectations; sticky information; unemployment; BEHAVIOR; robust; news; US; fluctuations

摘要

This paper develops a theory of subjective beliefs that departs from rational expectations, and shows that biases in household beliefs have quantitatively large effects on macroeconomic aggregates. The departures are formalized using model-consistent notions of pessimism and optimism which are supported by extensive time-series and cross-sectional evidence from household surveys. The role subjective beliefs play in aggregate fluctuations is quantified in a business cycle model with goods and labour market frictions. Consistent with the survey evidence, an increase in pessimism generates upward biases in unemployment and inflation forecasts and lowers economic activity. The underlying belief distortions reduce aggregate demand and propagate through frictional goods and labour markets. As a by-product of the analysis, solution techniques that preserve the effects of time-varying belief distortions in the class of linear solutions are developed.