Thesis
What do you expect?: Revisiting Expectation Formation Models
University of Iowa
Bachelor of Business Administration (BBA) , University of Iowa
Spring 2024
Abstract
This paper replicates prominent expectation formation models using contemporary inflation data across full and restricted samples. Employing the approach of Coibion and Gorodnichenko (2015), estimates of mean ex-ante forecast revisions on mean ex-post forecasting errors consistently indicate systematic underpredictions, aligning with prior literature. Structural parameter estimates within models incorporating information costs reveal notable information rigidities. Conversely, individual-level analysis reveals patterns of overreaction among forecasters. Notably, parameter estimates from a diagnostic expectations model suggest that individual forecasters assign approximately 56 percent more weight to new information than those of rational forecasters. However, these findings are tempered when observed across the full sample.
Details
- Title: Subtitle
- What do you expect?: Revisiting Expectation Formation Models
- Creators
- Calvin McElvain - University of Iowa
- Contributors
- Patrick Rossmann (Advisor) - University of IowaAnne P Villamil (Mentor) - University of Iowa
- Resource Type
- Thesis
- Project Type
- Honors Thesis
- Degree Awarded
- Bachelor of Business Administration (BBA) , University of Iowa
- Degree in
- Economics
- Date degree season
- Spring 2024
- Publisher
- University of Iowa
- Number of pages
- 29 pages
- Copyright
- Copyright © 2024 Calvin McElvain
- Language
- English
- Academic Unit
- Honors Program; Business Honors Theses
- Record Identifier
- 9984651452602771
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