Expectations play a crucial role in finance, macroeconomics, monetary economics, and fiscal policy. In the last decade a rapidly increasing number of laboratory experiments have been performed to study individual expectation formation, the interactions of individual forecasting rules, and the aggregate macro behavior they co-create. The aim of this article is to provide a comprehensive literature survey on laboratory experiments on expectations in macroeconomics and finance. In particular, we discuss the extent to which expectations are rational or may be described by simple forecasting heuristics, at the individual as well as the aggregate level.
We would like to thank the Editor John Duffy and two anonymous referees for detailed and helpful comments on an earlier draft. We gratefully acknowledge the financial support from the EU FP7 projects “Complexity Research Initiative for Systemic Instabilities” (CRISIS, Grant No. 288501), “Macro-Risk Assessment and Stabilization Policies with New Early Waring Signals” (Rastanews, Grant No. 320278), “Integrated Macro-Financial Modelling for Robust Policy Design” (MACFINROBODS, Grant No. 612796) and the INET-CIGI Research Grant “Heterogeneous Expectations and Financial Crises” (HExFiCs, Grant No. INO1200026).
Assenza, T., Bao, T., Hommes, C. and Massaro, D. (2014), "Experiments on Expectations in Macroeconomics and Finance", Experiments in Macroeconomics (Research in Experimental Economics, Vol. 17), Emerald Group Publishing Limited, pp. 11-70. https://doi.org/10.1108/S0193-230620140000017002Download as .RIS
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