Publisher:
Internat. Monetary Fund, Washington, DC
News - or foresight - about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic...
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früher: EBS Universität für Wirtschaft und Recht, Learning Center, Standort Wiesbaden, Fachbibliothek Rechtswissenschaften
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News - or foresight - about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react. Using tax policies as a leading example of foresight, simple theory makes transparent the economic behavior and information structures that generate non-fundamental equilibria. Econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes; biases are quantitatively important when two canonic
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Cover; Contents; I. Introduction; II. Analytical Example; A. The Econometrics of Foresight; Figures; 1. Responses of Capital to Tax Increase; B. Generalizations; III. Quantitative Importance of Foresight; A. Modeling Information Flows; B. Model Descriptions; C. Information Flows and Estimation Bias; Tables; 1. Information Flow Processes; IV. Solving the Problem; 2. Output Multipliers for a Labor Tax Change; A. An Organizing Principle; B. Lines of Attack; 1. The Narrative Approach; 2. Conditioning on Asset Prices; 3. Direct Estimation of DSGE Model; V. Concluding Remarks; Appendices
I. Simulations DetailsII. Testing Economic Theory; III. Municipal Bonds and Fiscal Foresight: Additional Results; IV. Assessing the Ex-Ante Approach; References
