Macro-Based Behavioral Economics

Macro-based behavioural economics (JEL E7) applies behavioural insights to macroeconomic phenomena.

Scope

It includes behavioural foundations of consumption, expectations, and policy, and bounded rationality in macro models.

Sub-topics

• General
• Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

Core questions

• How do behavioural factors shape macroeconomic outcomes?
• How do expectations form in practice?
• How does bounded rationality affect macro policy?

Key concepts

• Behavioural macroeconomics
• Expectations formation
• Bounded rationality
• Animal spirits
• Sentiment

Frequently asked questions

What is behavioural macroeconomics?

The incorporation of psychologically realistic behaviour (e.g., non-rational expectations) into macroeconomic analysis.