A Structural Analysis of Expectation Formation
ISBN:
978-3-540-53665-9
Auflage:
Softcover reprint of the original 1st ed. 1991
Verlag:
Springer Berlin
Land des Verlags:
Deutschland
Erscheinungsdatum:
13.03.1991
Reihe:
Lecture Notes in Economics and Mathematical Systems
Format:
Softcover
Seitenanzahl:
230
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Using panel data of individual firms drawn from French surveys, a structural analysis is developed to study the formation of production plans and the rationality of expectations. The production decision of a firm is defined as the optimal solution of a dynamic stochastic optimization problem. The empirical work amounts to recovering the structural parameters characterizing the model of the firm from estimates of the derived decision rule. The preceding analysis of production plans is based on the assumption that firms are rational. To justify this assumption, direct tests offer evidence that the Rational Expectations Hypothesis may not be rejected for quantity variables.
