Rational Forecasts or Social Opinion Dynamics?
Identification of Interaction Effects in a Business Climate Survey
This publication develops a methodology for examining social interactions in a business climate that challenges conventional notions of rational-based behavior. A stochastic model of social interactions forms the basis of the analysis in conjunction with simulation experiments. The author argues the theory of animal spirit proves to be a significant alternative to rational explanations of swings in consumer opinions and behavior.
© 2008 Kiel Institute for the World Economy.
The appendices contain the descriptive statistics and graphs.