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 …

This chapter surveys the literature that exploits data on expectations, typically from surveys,
in the estimation of macroeconomic DSGE models. Expectational data can be used to test …

Despite the widespread belief that technology shocks are the main source of business
fluctuations, recent empirical studies indicate that in the absence of financial frictions, a …

News shocks work through changes in expectations, so data on expectations contain
important information for identification of news shocks. We demonstrate this by estimating a …

Did the Federal Reserve's response to economic fundamentals change with the onset of the
Global Financial Crisis? Estimation of a monetary policy rule to answer this question faces a …

This paper exploits information from the term structure of survey expectations to identify
news shocks in aa DSGE model with rational expectations. We estimate a structural …

This paper proposes the use of data on expectations to identify the role of news shocks in
business cycles. This approach exploits the fact that news shocks cause agents to adjust …

Many key macroeconomic variables such as the NAIRU, potential GDP, and the neutral real
rate of interest—which are needed for policy analysis—are latent. Collectively, these latent …

We investigate the channels through which news influences the subjective beliefs of
economic agents, with a particular focus on their subjective uncertainty. The main insight of …

We solve a real business cycle model with rational inattention (an RI-RBC model). In the
RIRBC model, the growth rates of employment, investment, and output are about as …