Macroeconomic rationality and Lucas’ misperceptions model: further evidence from 41 countries.
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AbstractSeveral researchers have examined Lucas’ misperceptions model as well as various propositions derived from it within a cross-section empirical framework. The cross-section approach imposes a single monetary policy regime for the entire period. Our paper innovates on existing tests of those rational expectations propositions by allowing the simultaneous effect of monetary and short-run aggregate supply (oil price) shocks on output behavior and the employment of advanced panel econometric techniques. Our empirical findings, for a sample of 41 countries over 1949–1999, provide evidence in favor of the majority of rational expectations propositions.
CitationApergis, N., and Miller, S. (2004) ‘Macroeconomic rationality and Lucas’ misperceptions model: further evidence from 41 countries’, Journal of Economics and Business, 56, (3), pp.227-241. Doi: 10.1016/j.jeconbus.2003.10.002
JournalJournal of Economics and Business
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