01317nam a22001577a 4500999001900000008004100019100005300060245002500113260003400138300003500172520078700207773003400994906001401028942000701042952011001049  c519179d519179220214b           ||||| |||| 00| 0 eng d  aKohlhas, Alexandre N. and Walther, Ansgar932075  aAsymmetric attention  aThe American Economic Review   a111(3), Sep, 2021: p.2879-2925  aWe document that the expectations of households, firms, and professional forecasters in standard surveys simultaneously extrapolate from recent events and underreact to new information. Existing models of expectation formation, whether behavioral or rational, cannot account for these observations. We develop a rational theory of extrapolation based on limited attention, which is consistent with this evidence. In particular, we show that limited, asymmetric attention to procyclical variables can explain the coexistence of extrapolation and underreactions. We illustrate these mechanisms in a microfounded macroeconomic model, which generates expectations consistent with the survey data, and show that asymmetric attention increases business cycle fluctuations. – Reproduced   aThe American Economic Review   aECONOMICS  cAR  00102ddc40709393230aIIPAbIIPAd2022-02-14h111(3), Sep, 2021: p.2879-2925pAR126211r2022-02-14yAR