A Structural Analysis of Expectation Formation Based on Business Surveys of French Manufacturing Industry

Ivaldi Marc

ISBN 10: 0387536655 / ISBN 13: 9780387536651

Published by Springer

About this Item

Seller Inventory # 58141135

Bibliographic Details

Title: A Structural Analysis of Expectation ...

Publisher: Springer

Binding: Hardcover

Condition: New

About this title

Synopsis:

Using panel data of individual firms drawn from French surveys, a structural analysis is developed to study the formation of production plans and the rationality of expectations. The production decision of a firm is defined as the optimal solution of a dynamic stochastic optimization problem. The empirical work amounts to recovering the structural parameters characterizing the model of the firm from estimates of the derived decision rule. The preceding analysis of production plans is based on the assumption that firms are rational. To justify this assumption, direct tests offer evidence that the Rational Expectations Hypothesis may not be rejected for quantity variables.