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Institute of Economics

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  7. Publication by Noemi Schmitt and Frank Westerhoff in the Finance Research Letters!

Publication by Noemi Schmitt and Frank Westerhoff in the Finance Research Letters!

 

Dr. Noemi Schmidt and Prof. Dr. Frank Westerhoff have published an article entitled "Pricking asset market bubbles" in Finance Research Letters. 

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Abstract

We propose an asset-pricing model in which investors switch between extrapolative and regressive expectation rules subject to an evolutionary fitness measure and show that central banks may tame endogenous expectations-driven boom-bust cycles by adjusting interest rates with a view to the market’s momentum.

You can find the paper here: https://www.sciencedirect.com/science/article/abs/pii/S154461231930844X