Animal Spirits and Monetary Policy


We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (“Animal Spirits”) that are generated by the correlation of biased beliefs. We contrast the dynamics of this model with a stylized DSGE-version of the model and we… (More)



Citations per Year

Citation Velocity: 11

Averaging 11 citations per year over the last 3 years.

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