Template-Type: ReDIF-Paper 1.0
Author-Name: Chunping Liu
Author name: Patrick Minford
Title: Comparing Behavioural and Rational Expectations for the US Post-War Economy
Abstract: The banking crisis has caused a resurgence of interest in behavioural models of expectations in macroeconomics. 
Here we evaluate behavioural and rational expectations econometrically in a New Keynesian framework, using US post-war data and the method of indirect inference. 
We nd that after full reestimation the model with behavioural expectations is strongly rejected by the data, 
whereas the standard rational expectations version passes the tests by a substantial margin. 
File-URL: http://www.ntu.ac.uk/__data/assets/pdf_file/0018/310257/Comparing-behavioural-and-rational-expectations-for-the-us-post-war.pdf
File-Format: Application/pdf
File-Function: First version, 2013
Creation-Date: 2013-02
Classification-JEL: C10, C32
Keywords: Behavioural expectation, rational expectation, bank crisis, indirect inference. 
Handle: RePEc:nbs:wpaper:2013/02