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oai:dash.harvard.edu:1/373647562020-08-28T10:47:42Zcom_1_1col_1_4927603

Neumann, Miles 2020-08-28T10:47:42Z 2020-05 2020-06-17 2020 2020-08-28T10:47:42Z Neumann, Miles. 2020. Not So Great Expectations: An Analysis of Expectation Determinants and the Predictability of Expectation Errors. Bachelor's thesis, Harvard College. https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37364756 In this paper, I use novel survey data from the Federal Reserve Bank of New York’s Survey of Consumer Expectations (SCE) to analyze expectations of national inflation, national stock market returns, personal credit access, and personal financial wellbeing to test the rational expectations hypothesis (REH). For each of these variables, I examine the determinants of expectations as well as the predictability of expectation errors. Overall, my results indicate that prior personal experience, prior variable performance, and demographic characteristics can predict errors in expectation of both national and individual variables. Such results are inconsistent with the REH because they imply that information available at time t can be used to predict expectation errors at time t+1. In other words, individuals are predictably biased when forming expectations about the future. Applied Mathematics Applied Mathematics application/pdf en Not So Great Expectations: An Analysis of Expectation Determinants and the Predictability of Expectation Errors Thesis or Dissertation text 2020-11-01 2020-11-01 LAA Neumann, Miles milesneumann@me.com 2020 Harvard College Harvard College Undergraduate Undergraduate AB AB Applied Mathematics Applied Mathematics Publication LAAopen.access