Cars Hommes

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Staff working papers

Ten Isn’t Large! Group Size and Coordination in a Large-Scale Experiment

Economic activities typically involve coordination among a large number of agents. These agents have to anticipate what other agents think before making their own decisions.
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability JEL Code(s): C, C9, C92, D, D8, D83, D9, D90, G, G2, G20

Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments

Staff Working Paper 2019-27 George Evans, Cars Hommes, Isabelle Salle, Bruce McGough
Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon.

Inflation Targeting and Liquidity Traps Under Endogenous Credibility

Staff Working Paper 2019-9 Cars Hommes, Joep Lustenhouwer
Policy implications are derived for an inflation-targeting central bank, whose credibility is endogenous and depends on its past ability to achieve its targets. This is done in a New Keynesian framework with heterogeneous and boundedly rational expectations.

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