24 August 2019

[Book] Behavioural macroeconomics

Be the first to share
Media
Business
Services
Social Issues

Behavioural Macroeconomics: Theory and Policy
Paul De Grauwe and Yuemei Ji
Oxford University Press
October 2019, 256 pages

Modern macroeconomics has been based on the paradigm of the rational individual capable of understanding the complexity of the world. This has created a very shallow theory of the business cycle in which nothing happens in the macroeconomy unless shocks occur from outside. Behavioural Macroeconomics: Theory and Policy uses a different paradigm. It assumes that individual agents experience cognitive limitations preventing them from having rational expectations. Instead these individuals use simple rules of behaviour.

Behavioural Macroeconomics introduces rationality by allowing individuals to learn from their mistakes and to switch to the rules that perform better. It introduces the idea of endogenously generated “animals spirits” that drive the business cycle and are in turn influenced by it, and applies this model to shed new light on a number of important issues. It analyses the role of fiscal policy in stabilizing the economy while maintaining debt sustainability; expands the model to include a banking sector and show how banks amplify the booms and busts; and explains how animal spirits help to synchronize the business cycles across countries.

The model set out in Behavioural Macroeconomics leads to very different policy implications from the mainstream macroeconomic model. It shows how policymakers have a responsibility to stabilize an otherwise unstable system.

Paul De Grauwe is John Paulson Professor at the London School of Economics, He was a member of the Belgian parliament from 1991 to 2003. He is honorary doctor of the University of St Gallen (Switzerland), the University of Turku (Finland), the University of Genoa, the University of Valencia and Maastricht University. He is a research fellow at the Centre for European Policy Studies in Brussels and CEPR fellow in London. He is vice-chair of the Portuguese Fiscal Council. His research interests are in the economics of monetary unions and behavioural macroeconomics. His book publications include: The Limits of the Market (Oxford University Press, 2017), The Economics of Monetary Union (Oxford University Press, 12th Edition, 2018), and Lectures on Behavioral Macroeconomics (Princeton University Press, 2012).

Yuemei Ji is a lecturer in Economics at University College London. She is an associate research fellow at the Centre for European Policy Studies in Brussels. Her research interests cover macroeconomics in general and the European Monetary Union during the post-crisis period in particular. She has done intensive research on the causes of Eurozone debt crisis and its impact on the austerity policies in the Eurozone. She is a co-editor of The Political Economy of Structural Reforms in Europe (Oxford University Press, 2018)

Be the first to share
14 November 2019
NYTimes Magazine special issue on the future of the internet
Online Cesspool Got You Down? You Can Clean It Up, For a Price By Kevin Roose A new “luxury internet” is poised to make the online experience even more unequal than it already is. It’s not surprising that …
28 September 2019
[Book] Too Smart
Too Smart: How Digital Capitalism is Extracting Data, Controlling Our Lives, and Taking Over the World By Jathan Sadowski The MIT Press March 2020, 240 pages Who benefits from smart technology? Whose interests are served when we trade our …
24 August 2019
[Book] The Costs of Connection
The Costs of Connection: How Data Is Colonizing Human Life and Appropriating It for Capitalism by Nick Couldry and Ulises A. Mejias Stanford University Press August 2019, 352 pages Just about any social need is now met with an …
5 April 2019
The story of Spotify personas
Spotify's product designer Mady Torres de Souza and senior user researchers Olga Hörding and Sohit Karol explain how they developed their personas tool, how they use it today and why it’s so useful for an …
4 April 2019
When ethnography becomes a joke
For a number of years, we have witnessed a diminishing appetite for ethnographic work among commercial clients, writes Patricia Sunderland, PhD and founder of Cultural Research and Analysis, on the site of the Qualitative Research …
4 April 2019
Old, online, and fed on lies: How an aging population will reshape the internet
Although many older Americans have, like the rest of us, embraced the tools and playthings of the technology industry, a growing body of research shows they have disproportionately fallen prey to the dangers of internet …
16 February 2019
[Book] The Next Billion Users: Digital Life Beyond the West
The Next Billion Users: Digital Life Beyond the West by Payal Arora Harvard University Press, 2019 280 pages A digital anthropologist examines the online lives of millions of people in China, India, Brazil, and across the Middle East—home to …
20 January 2019
[Book] The Age of Surveillance Capitalism
The Age of Surveillance Capitalism: The Fight for the Future at the New Frontier of Power Shoshana Zuboff Profile Books, 31 January 2019 704 pages The challenges to humanity posed by the digital future, the first detailed examination of …

We are an international experience design consultancy helping companies and organisations to innovate their products, services and processes by putting people and their experiences first.

5 July 2019
Experientia on addressing vaccine hesitancy

Vaccine hesitancy is a top10 global health threat. Dealing with it successfully requires understanding it as a behaviour and generating a holistic view of people’s perspectives & ecosystems. This way we can identify the best opportunities for intervention. Here is Experientia’s position on vaccine hesitancy and our tailor-made support for the vaccine industry.

2 May 2019
MacArthur Foundation’s “100&Change” competition now calling for applications

100&Change is a MacArthur Foundation competition for a $100 million grant to fund a single proposal that will make measurable progress toward solving a significant problem. 100&Change will select a bold proposal that promises real progress toward solving a critical problem of our time. And it will award a $100 million grant to help make […]

19 March 2019
Interested in a career with us?

Then we are interested in hearing from you. We have several positions available for talented UX/UI and service designers who are passionate about creating world-class user experiences. Please see the job descriptions on our website for more information, and send us your CV with a cover letter statement about yourself, your experience, and what UX […]

22 December 2018
Our very best wishes for 2019! / Auguri da Experientia!
4 October 2018
Bringing​ ​patients into focus at the Roche Innovation Summit

Experientia is proud to have been a key participant at the Roche Innovation Summit, held at Roche headquarters in Basel Switzerland on 19 June 2018. Themed “​Transforming the Healthcare Experience Together​”, the summit aimed to galvanize the Roche community around the future transformation of healthcare and diagnostics. With 800 attendees from Roche and Genentech global […]

13 June 2018
Invito: DesAlps design thinking workshop per la tua startup

Hai una startup? Hai mai pensato ai benefici che potrebbe trarre dal Design Thinking? Questa è l’opportunità per scoprirlo! DesAlps Workshop #2: Il Design Thinking per la tua startup! Giovedì 28 giugno 2018 – dalle 9:30 alle 17:00 @ I3P | Corso Castelfidardo 30/a, Torino —– Nell’ambito del progetto europeo DesAlps, un team di esperti […]

See all articles