Publikation von Noemi Schmitt und Frank Westerhoff in Finance Research Letters erschienen!

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.

https://www.sciencedirect.com/science/article/abs/pii/S154461231930844X