Predicting the macroeconomic effects of abstract and concrete events
In: European journal of political economy, Band 24, Heft 1, S. 192-201
Abstract
This paper presents experimental evidence that non-experts do not distinguish between macroeconomically relevant and irrelevant events in the way economic theory would suggest. Students were asked to predict the likely consequences of several events in fictitious newspaper reports on GDP, inflation, unemployment, and aggregate sales. They overestimate the effects of irrelevant events, especially if those events are easy to imagine. The magnitudes of the predicted effects are clearly related to the concreteness of the events. The results are compatible with the use of the availability heuristic in the process of forming economic expectations. [Copyright 2008 Elsevier B.V.]
Themen
Beliefs, Expectations, Gross Domestic Product, Newspapers, Economic Theories, Heuristics, Inflation, Unemployment
Sprachen
Englisch
Verlag
Elsevier Science, Amsterdam The Netherlands
ISSN: 1873-5703
DOI
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