Rational herds and endogenous fluctuations in consumer sentiment

Thesis

This thesis models \textit{endogenous} fluctuations in consumer sentiment and sentiment driven endogenous business cycles in the context of a general equilibrium model with rational herds and social learning in consumer durable goods sector about a hidden state of nature. I want to understand the theoretical conditions under which one gets endogenous and asymmetric cycles in this class of models. The learning dynamics are very sensitive to the variances specified for signal distributions and ...

Expand abstract

Authors: Memon, S

• Type of award: MPhil taught course
• Level of award: Masters
• Awarding institution: University of Oxford
• Language: English
• Keywords: informational cascades; resolution method; rational herds; information frictions in macroeconomics; bayesian learning; nonlinear business cycle models; endogenous business cycles; two sector new Keynesian models; social learning; asymmetric business cycles; consumer sentiment
• Subjects: Macroeconomics--Mathematical models