Proceedings of the 3rd Annual International Conference on Social Science and Contemporary Humanity Development

Heterogeneous Expectations in An Estimated Medium-Scale DSGE Model

Authors
Wei Zhao
Corresponding Author
Wei Zhao
Available Online September 2017.
DOI
https://doi.org/10.2991/sschd-17.2017.98How to use a DOI?
Keywords
New Keynesian model; Heterogeneous expectations; Adaptive learning.
Abstract

This paper incorporates adaptive learning and heterogeneous expectations into the traditional rational expectation medium-scale DSGE model. In our model, some agents make mistakes when forecasting future macroeconomics variables, while other agents have rational expectations, so the expectations present heterogeneity. The estimation and simulation results of our model show that: (1) Public expectations in China are dominated by the adaptive learning behaviors; (2) Heterogeneous expectation behaviors reduce the responses of inflation and output to the money supply shock. Technology shock contributes most fluctuations in inflation, and investment shock plays an important role in explaining the output fluctuations.

Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

Volume Title
Proceedings of the 3rd Annual International Conference on Social Science and Contemporary Humanity Development
Series
Advances in Social Science, Education and Humanities Research
Publication Date
September 2017
ISBN
978-94-6252-401-9
ISSN
2352-5398
DOI
https://doi.org/10.2991/sschd-17.2017.98How to use a DOI?
Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Wei Zhao
PY  - 2017/09
DA  - 2017/09
TI  - Heterogeneous Expectations in An Estimated Medium-Scale DSGE Model
BT  - Proceedings of the 3rd Annual International Conference on Social Science and Contemporary Humanity Development
PB  - Atlantis Press
SP  - 514
EP  - 519
SN  - 2352-5398
UR  - https://doi.org/10.2991/sschd-17.2017.98
DO  - https://doi.org/10.2991/sschd-17.2017.98
ID  - Zhao2017/09
ER  -