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UID:f5478e0f3013847ac1f9b29677fa0fc5
CATEGORIES:Seminars
CREATED:20180608T102658
SUMMARY:Lunch Seminar: Luigi Iovino - Università Bocconi
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:\n\nCentral Bank Balance Sheet Policies without Rational Expectations (join
 t with Dmitriy Sergeyev)\n\n\nAbstract:\nWe study the effects of central ba
 nk balance sheet policies -namely, quantitative easing and foreign exchange
  interventions - in a model where people form expectations through an itera
 tive process known as level-k thinking. This process is consistent with exp
 erimental evidence of the behavior of people who are confronted with novel 
 strategic situations. This choice of belief formation process is motivated 
 by the fact that some balance sheet policies are novel while others are sti
 ll not well understood. We emphasize two main theoretical results. First, u
 nder a broad set of conditions, central bank interventions are effective un
 der level-k thinking, while they are neutral in the rational expectations e
 quilibrium. Second, forecast errors about future endogenous variables are p
 redictable by balance sheet interventions. We confirm these predictions usi
 ng data on the mortgage purchases by United States government sponsored ent
 erprises as a proxy for quantitative easing.\n
DTSTAMP:20260406T223107Z
DTSTART:20180705T130000Z
DTEND:20180705T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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