000			01386nam a22001457a 4500
999			_c521065 _d521065
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100			_aBordalo,P., Gennaioli, N. and Shleifer, A. _936121
245			_aOverreaction and diagnostic expectations in macroeconomics
260			_aThe Journal of: Economic Perspectives
300			_a36(3), Summer, 2022: p.223-244
520			_aWe present the case for the centrality of overreaction in expectations for addressing important challenges in finance and macroeconomics. First, non-rational expectations by market participants can be measured and modeled in ways that address some of the key challenges posed by the rational expectations revolution, most importantly the idea that economic agents are forward-looking. Second, belief overreaction can account for many long-standing empirical puzzles in macro and finance, which emphasize the extreme volatility and boom-bust dynamics of key time series, such as stock prices, credit, and investment. Third, overreaction relies on psychology and is disciplined by survey data on expectations. This suggests that relaxing the assumption of rational expectations is a promising strategy, helps theory and evidence go together, and promises a unified view of a great deal of data. – Reproduced
773			_aThe Journal of: Economic Perspectives
906			_aMACROECONOMICS
942			_cAR