Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations

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Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations

Author Info

Maurizio Bovi (ISAE - Institute for Studies and Economic Analyses)

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Maurizio Bovi

Abstract

Using data from the Business Surveys Unit of the European Commission as a long-running-continental-scale experiment, this paper examines how, and how accurately, people assess economic systems. Data show both commonsense (e.g. people know the past better than the future) and puzzling results (e.g. there is a systematic bias in forecasts). The former support the reliability of the surveys, the latter are in sharp contrast with the standard maintained hypothesis of a world populated by calculating and unemotional maximizers. The dualism of behavior may be fruitfully explored via cognitive psychology, according to which both logic and emotions systematically drive people’s choices.

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Publisher Info
Paper provided by ISAE - Institute for Studies and Economic Analyses - (Rome, ITALY) in its series ISAE Working Papers with number 66.

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Length: 48 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:isa:wpaper:66

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Paper
- Maurizio Bovi, 2005. "Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations," Macroeconomics 0512002, EconWPA. [Downloadable!]

Find related papers by JEL classification:
C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-02-24 (All new papers)
NEP-CBE-2007-02-24 (Cognitive & Behavioural Economics)
NEP-NEU-2007-02-24 (Neuroeconomics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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