Marc Buchanan’s blog discusses paper by Cars Hommes and Domenico Massaro
Marc Buchanan, a blogger prominent blogger discusses the TI discussion paper by fellows Cars Hommes and Dominico Massaro in his December 2013 blog 'The Physics of Finance: A Look at Economics and Finance through the Lense of Physics.'
In his latest entry, “Macroeconomics: The illusion of the “learning literature”, Buchanan discusses the paper entitled ‘Individual Expectations and Aggregate Macro Behavior’ by Tiziana Assenza, Peter Heemeijer, and fellows Cars Hommes and Domenico Massaro. Hommes and Massaro et al study the way in which individual expectations shape aggregate macroeconomic variables that is crucial for the transmission and effectiveness of monetary policy. The paper researches the individual expectations formation process and the interaction with monetary policy, within a standard New Keynesian model, by means of laboratory experiments with human subjects. Marc Buchanan is a physicist and science writer and a former editor with the international science journal Nature. His blog, ‘The Physics of Finance’ explores the potential for the transformation of economics and finance through the inspiration of physics and the other natural sciences.