TY  - BOOK
AU  - Angeletos,George-Marios
AU  - Huo,Zhen
AU  - Sastry,Karthik A.
ED  - National Bureau of Economic Research.
TI  - Imperfect Macroeconomic Expectations: Evidence and Theory 
T2  - NBER working paper series
PY  - 2020///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - June 2020; Hardcopy version available to institutional subscribers
N2  - We document a new fact about expectations: in response to the main shocks driving the business cycle, expectations underreact initially but overshoot later on. We show how previous, seemingly conflicting, evidence can be understood as different facets of this fact. We finally explain what the cumulated evidence means for macroeconomic theory. There is little support for theories emphasizing underextrapolation or two close cousins of it, cognitive discounting and level-K thinking. Instead, the evidence favors the combination of dispersed, noisy information and over-extrapolation
UR  - https://www.nber.org/papers/w27308
UR  - http://dx.doi.org/10.3386/w27308
ER  -