C9 - Design of Experiments

• The Formation of House Price Expectations in Canada: Evidence from a Randomized Information Experiment

  Staff Analytical Note 2019-24 Marc-André Gosselin, Mikael Khan, Matthieu Verstraete

  We conduct a randomized information experiment leveraging the Canadian Survey of Consumer Expectations. We provide causal evidence that respondents revise both their short- and medium-term expectations of future house price growth in a way that is consistent with observed short-term momentum in house prices. However, empirically, house price growth tends to revert to its mean in the medium term.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Financial stability, Housing JEL Code(s): C, C9, D, D8, D84, R, R2, R21

• Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments

  Staff Working Paper 2019-27 George Evans, Cars Hommes, Isabelle Salle, Bruce McGough

  Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon.

  Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Central bank research, Economic models, Financial markets JEL Code(s): C, C9, C92, D, D8, D84, E