Imperfect Knowledge, Asset Price Swings, and Structural Slumps
Publikation: Bidrag til bog/antologi/rapport › Bidrag til bog/antologi › Forskning
Standard
Imperfect Knowledge, Asset Price Swings, and Structural Slumps. / Juselius, Katarina.
Rethinking Expectations: The Way Forward for Macroeconomics. red. / Roman Frydman; Edmund Phelps. Princeton, New Jersey : Princeton University Press, 2013. s. 328-350.Publikation: Bidrag til bog/antologi/rapport › Bidrag til bog/antologi › Forskning
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - CHAP
T1 - Imperfect Knowledge, Asset Price Swings, and Structural Slumps
AU - Juselius, Katarina
PY - 2013
Y1 - 2013
N2 - This paper discusses interactions between speculative behavior in the currency markets and aggregate fluctuations in the real economy. It builds on the Structural Slumps theory in Phelps (1994) and the recent theory of Imperfect Knowledge Economics in Frydman and Goldberg (2007). The former emphasizes real interest rates and real exchange rates as potentially important determinants underlying the persistent fluctuations in aggregate activities, and the latter provides the conditions under which speculative behavior in currency markets generates such persistence. The paper argues that by combing the two theories we can shed new light on the two-way interdependence between persistent swings in asset markets and persistent fluctuations in the real economy. In particular, we may improve our understanding of the mechanisms behind the long recurrent spells of high unemployment that continue to mar our economies.
AB - This paper discusses interactions between speculative behavior in the currency markets and aggregate fluctuations in the real economy. It builds on the Structural Slumps theory in Phelps (1994) and the recent theory of Imperfect Knowledge Economics in Frydman and Goldberg (2007). The former emphasizes real interest rates and real exchange rates as potentially important determinants underlying the persistent fluctuations in aggregate activities, and the latter provides the conditions under which speculative behavior in currency markets generates such persistence. The paper argues that by combing the two theories we can shed new light on the two-way interdependence between persistent swings in asset markets and persistent fluctuations in the real economy. In particular, we may improve our understanding of the mechanisms behind the long recurrent spells of high unemployment that continue to mar our economies.
M3 - Book chapter
SN - 9780691155234
SP - 328
EP - 350
BT - Rethinking Expectations
A2 - Frydman, Roman
A2 - Phelps, Edmund
PB - Princeton University Press
CY - Princeton, New Jersey
ER -
ID: 37393770