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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Rational Exuberance Booms, Review of Economic Dynamics January ; 2020 (2019). Ambrocio, Gene

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Ambrocio, Gene 
Number of authors
Status Published
Year of publication 2020 
Date 16.07.2019 
Name of article Rational Exuberance Booms 
Name of journal Review of Economic Dynamics
Volume of issue 35 
Number of issue January ; 2020 
Pages 263-282 
Abstract I provide a theory of information production and learning that can help account for both the excessive optimism that fueled booms preceding crises and the slow recoveries that followed. In my theory, persistence and the size of expectation errors depend on information production about changes in aggregate fundamentals. In turn information production, via credit screening, tends to fall during both very good and very bad times. The former gives rise to episodes of rational exuberance in which optimistic beliefs may sustain booms even as fundamentals decline. I also document evidence from survey forecasts consistent with the model predictions.
Free text descriptor in Finnish informaatio; odotukset; suhdannevaihtelut; oppiminen; luotot 
Free text descriptor in English business cycles; credit screening; information choice; social learning 
JEL-codes D83; E32; E44; G01; G14 
ISSN / e-ISSN 1094-2025 
auki Internet addresses
Additional information Available online 16 July 2019
Notes BoF DP 24/2015 

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