ENGLISH

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

By Prof. , Ph D Marc Ivaldi (auth.)

Book information

Publisher
Springer-Verlag Berlin Heidelberg
Year
1991
ISBN
978-3-540-53665-9, 978-3-642-46735-6
DOI
10.1007/978-3-642-46735-6
Language
english
Format
PDF
Filesize
7 MB (7413409 bytes)
Series
Lecture Notes in Economics and Mathematical Systems 354
Edition
1
Pages
230\244
Time added
2013-12-12 02:00:00
Economic Theory

Description

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.

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