D84 - Expectations; Speculations - Bank of Canada
https://www.bankofcanada.ca/rss-feeds/
Bank of Canada RSS Feedsen2024-03-29T15:07:22+00:00Are Distorted Beliefs Too Good to be True?
https://www.bankofcanada.ca/2003/02/working-paper-2003-4/
In a recent attempt to account for the equity-premium puzzle within a representative-agent model, Cecchetti, Lam, and Mark (2000) relax the assumption of rational expectations and in its place use the assumption of distorted beliefs. The author shows that the explanatory power of the distorted beliefs model is due to an inconsistency in the model and that an attempt to remove this inconsistency removes the model's explanatory power.2003-02-01T16:49:06+00:00enAre Distorted Beliefs Too Good to be True?2003-02-01Economic modelsFinancial marketsWorking Paper 2003-4 https://www.bankofcanada.ca/wp-content/uploads/2010/02/wp03-4.pdfAre Distorted Beliefs Too Good to be True?Miroslav MisinaFebruary 2003DD8D84GG1G12