Expectations Formation and Business Cycle Fluctuations: An Empirical Analysis of Actual and Expected Output in UK
نویسندگان
چکیده
Direct measures of expectations, derived from survey data, are used in a Vector Autoregressive model of actual and expected output in eight industries in the UK manufacturing sector. No evidence is found with which to reject rationality in the expectations series when measurement error is appropriately taken into account. The VAR analysis illustrates the importance of intersectoral interactions and business con ̄dence in explaining the time pro ̄le of industrial outputs, examines the mechanisms by which shocks are propagated across sectors and over time and investigates the relative importance of sectoral and aggregate shocks of di®erent types.
منابع مشابه
The Effect of Business Cycle Fluctuations on Import Protection in Selected Developing Countries
In recent decades, theorists proposed the role of domestic components such as interior active groups, policies and macroeconomic indicators on determination of protection policies. In the context of recent studies, this study has investigated the effect of business cycle fluctuations on import protection for selected developing countries in 1995-2011 by using dynamic panel data method. Furtherm...
متن کاملData envelopment analysis in service quality evaluation: an empirical study
Service quality is often conceptualized as the comparison between service expectations and the actual performance perceptions. It enhances customer satisfaction, decreases customer defection, and promotes customer loyalty. Substantial literature has examined the concept of service quality, its dimensions, and measurement methods. We introduce the perceived service quality index (PSQI) as a sing...
متن کاملExpectation Shocks
Psychological factors, market sentiments, and shifts in beliefs are believed by many to play a nontrivial role in inducing and amplifying economic fluctuations. Yet, these forces are rarely considered in macroeconomic models. This paper provides an attempt to evaluate the empirical role of expectational shocks on business cycle fluctuations. The paper relaxes the conventional assumption of rati...
متن کاملSentiment and the U.s. Business Cycle
Psychological factors are commonly believed to play a role on cyclical economic fluctuations, but they are typically omitted from state-of-the-art macroeconomic models. This paper introduces “sentiment” in a medium-scale DSGE model of the U.S. economy and tests the empirical contribution of sentiment shocks to business cycle fluctuations. The assumption of rational expectations is relaxed. The ...
متن کاملAnalysis of the Relationship between the Business Cycle and Inflation Gap in Time-Frequency Domain
Controlling the business cycle and minimizing the inflation gap are considered as two major goals for monetary policy. Hence, the policymaker will be able to make more decisive decisions with an awareness of the dynamic relationship and causal relationship between these two variables. Accordingly, the present study uses a discrete and continuous wavelet transform to provide a new understanding ...
متن کامل