Abstract
We test the hypothesis associated with a standard assumption in the theoretical literature on learning: that economic agents interpret information identically. We use a data set based on a survey of Israeli business executives forecasting future inflation. One of the main advantages of using this data is that a major change in the inflation regime in 1985 can be treated as a natural experiment in new beliefs formation. We develop a methodology for testing this hypothesis and find evidence that is inconsistent with the identical-interpretation hypothesis, but is consistent with the proposed alternative.
Original language | American English |
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Pages (from-to) | 217-226 |
Number of pages | 10 |
Journal | Review of Economics and Statistics |
Volume | 81 |
Issue number | 2 |
DOIs | |
State | Published - May 1999 |