Socioeconomic Interaction and Swings in Business Confidence Indicators ∗

Abstract

We propose a stochastic model of interactive formation of individual expectations regarding the business climate in an industry. Our model is motivated by a business climate survey conducted since 1960 in Germany by the Ifo-institute (www.ifo.de). In accordance with the data structure of this survey, in our model there is associated to each economic agent… (More)

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