کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
1051922 | 946365 | 2011 | 10 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Modeling and testing the diffusion of expectations: An EITM approach Modeling and testing the diffusion of expectations: An EITM approach](/preview/png/1051922.png)
This paper uses the empirical implications of theoretical models (EITM) framework to examine the consequences of the asymmetric diffusion of expectations. In the spirit of the traditional two-step flow model of communication, less-informed agents learn the expectations of more-informed agents. We find that when there is misinterpretation in the information acquisition process, a boomerang effect exists. In this equilibrium the less-informed agents’ forecasts confound those of more-informed agents. We apply the EITM approach to a key economic variable known to have a relation to economic fluctuations – inflation expectations. Using surveyed inflation expectations data for the period, 1978–2000, we find the boomerang effect exists. One implication of this finding pertains to economic policy and economic volatility: because policymakers have more information than the public, the boomerang effect can lead policymakers to make inaccurate forecasts of economic conditions and conduct erroneous policies which contribute to economic instability.
► The empirical implications of theoretical models (EITM) framework.
► Theoretical and empirical study of the asymmetric diffusion of expectations.
► The existence of a boomerang effect due to error in the transmission of information.
Journal: Electoral Studies - Volume 30, Issue 3, September 2011, Pages 389–398