Lecture: Sentiments, Financial Markets, and Macroeconomic Fluctuations
2045 Title: Sentiments, Financial Markets, and Macroeconomic Fluctuations
Lecturer: Pengfei WANG
Host: Ge ZHOU
Time: 3:30—5:00 p.m., 23 June, 2015
Location: 418 meeting room, School of Economics (Yuquan Campus)
All the teachers and students are welcome to attend the lecture!
Abstract:
This lecture will introduce how financial information frictions can generate sentiment-driven fluctuations in asset prices and self-fulfilling business cycles. In our model economy, exuberant financial market sentiments of high output and high demand for capital increase the price of capital, which signals strong fundamentals of the economy to the real side and consequently leads to an actual boom in real output and employment. The model further derives implications for asymmetric non-linear asset prices and for economic contagion and co-movement across countries. In the extension to the dynamic OLG setting, our model demonstrates that sentiment shocks can generate persistent output, employment and business cycle fluctuations, and offers some new implications for asset prices over business cycles.
School of Economics Zhejiang University
23 June, 2015
