Overreaction in expectations: Evidence and theory
We investigate biases in expectations across different settings through a large-scale
randomized experiment where participants forecast stable stochastic processes. The …
randomized experiment where participants forecast stable stochastic processes. The …
Subjective models of the macroeconomy: Evidence from experts and representative samples
We study people's subjective models of the macroeconomy and shed light on their
attentional foundations. To do so, we measure beliefs about the effects of macroeconomic …
attentional foundations. To do so, we measure beliefs about the effects of macroeconomic …
Memory and probability
In many economic decisions, people estimate probabilities, such as the likelihood that a risk
materializes or that a job applicant will be a productive employee, by retrieving experiences …
materializes or that a job applicant will be a productive employee, by retrieving experiences …
Memory, attention, and choice
Building on a textbook description of associative memory, we present a model of choice in
which a choice option cues recall of similar past experiences. Memory shapes valuation and …
which a choice option cues recall of similar past experiences. Memory shapes valuation and …
Overreaction and diagnostic expectations in macroeconomics
We present the case for the centrality of overreaction in expectations for addressing
important challenges in finance and macroeconomics. First, non-rational expectations by …
important challenges in finance and macroeconomics. First, non-rational expectations by …
What do the data tell us about inflation expectations?
Inflation expectations are central to economics because they affect the effectiveness of fiscal
and monetary policy, as well as realized inflation. We survey the recent literature with a …
and monetary policy, as well as realized inflation. We survey the recent literature with a …
Stories, statistics, and memory
For many decisions, we encounter relevant information over the course of days, months or
years. We consume such information in various forms, including stories–qualitative content …
years. We consume such information in various forms, including stories–qualitative content …
A macro-finance model with sentiment
P Maxted - Review of Economic Studies, 2024 - academic.oup.com
This paper incorporates diagnostic expectations into a general equilibrium macroeconomic
model with a financial intermediary sector. Diagnostic expectations are a forward-looking …
model with a financial intermediary sector. Diagnostic expectations are a forward-looking …
Diagnostic business cycles
A large psychology literature argues that, due to selective memory recall, decision-makers'
forecasts of the future are overly influenced by the perceived news. We adopt the diagnostic …
forecasts of the future are overly influenced by the perceived news. We adopt the diagnostic …
Associative memory and belief formation
Information is often embedded in memorable contexts, which may cue the asymmetric recall
of similar past news through associative memory. We design a theory-driven experiment, in …
of similar past news through associative memory. We design a theory-driven experiment, in …