Imperfect Knowledge, Asset Price Swings and Structural Slumps: A Cointegrated VAR Analysis of Their Interdependence

TY - UNPB

T1 - Imperfect Knowledge, Asset Price Swings and Structural Slumps

T2 - A Cointegrated VAR Analysis of Their Interdependence

AU - Juselius, Katarina

N1 - JEL classification: E24, F31, F41

PY - 2010

Y1 - 2010

N2 - This paper is an empirically based discussion of interactions between speculative behavior in the currency markets and aggregate fluctuations in the real economy. It builds on the recent theory of Imperfect Knowledge Economics in Frydman and Goldberg (2007) and combines this with the Structural Slumps theory in Phelps (1994). The paper argues that this is likely to imcrease our understanding of the long recurrent spells of high unemployment that continue to mar our economies.

AB - This paper is an empirically based discussion of interactions between speculative behavior in the currency markets and aggregate fluctuations in the real economy. It builds on the recent theory of Imperfect Knowledge Economics in Frydman and Goldberg (2007) and combines this with the Structural Slumps theory in Phelps (1994). The paper argues that this is likely to imcrease our understanding of the long recurrent spells of high unemployment that continue to mar our economies.

KW - Faculty of Social Sciences

KW - financial markets

KW - speculation

KW - long swings

KW - CVAR

M3 - Working paper

BT - Imperfect Knowledge, Asset Price Swings and Structural Slumps

PB - Department of Economics, University of Copenhagen

ER -