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BEGIN:VEVENT
UID:f5478e0f3013847ac1f9b29677fa0fc5
CATEGORIES:Seminars
CREATED:20180608T102658
SUMMARY:Lunch Seminar: Luigi Iovino - Università Bocconi
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p><strong><span style="font-size: 11pt; font-family: 'Calibri','sans-serif
 ';">Central Bank Balance Sheet Policies without Rational Expectations</span
 ></strong><span style="font-size: 11pt; font-family: 'Calibri','sans-serif'
 ;"> (joint with Dmitriy Sergeyev)</span></p><p><strong><span style="font-si
 ze: 11pt; font-family: 'Calibri','sans-serif';">Abstract:</span></strong></
 p><p style="text-align: justify;"><span style="font-size: 11pt; font-family
 : 'Calibri','sans-serif';">We study the effects of central bank balance she
 et policies -namely, quantitative easing and foreign exchange interventions
  - in a model where people form expectations through an iterative process k
 nown as level-k thinking. This process is consistent with experimental evid
 ence of the behavior of people who are confronted with novel strategic situ
 ations. This choice of belief formation process is motivated by the fact th
 at some balance sheet policies are novel while others are still not well un
 derstood. We emphasize two main theoretical results. First, under a broad s
 et of conditions, central bank interventions are effective under level-k th
 inking, while they are neutral in the rational expectations equilibrium. Se
 cond, forecast errors about future endogenous variables are predictable by 
 balance sheet interventions. We confirm these predictions using data on the
  mortgage purchases by United States government sponsored enterprises as a 
 proxy for quantitative easing.</span></p>
DTSTAMP:20260406T223312Z
DTSTART:20180705T130000Z
DTEND:20180705T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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