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Si us plau utilitzeu sempre aquest identificador per citar o enllaçar aquest document: https://hdl.handle.net/2445/231296
Availability Heuristic in the Real Business Cycle Model
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This thesis studies the aggregate implications of the availability heuristic within a Real Business Cycle (RBC) framework with heterogeneous expectations. A natural intuition is that agents who systematically misperceive future productivity should make the economy more volatile. The opposite is true. The model considers an economy in which the true productivity process follows an AR(2), while a fraction of agents perceive it as an AR(1), overweighting recent productivity realizations and neglecting information in more distant lags. Quantitatively, a larger behavioral share reduces aggregate capital volatility while leaving long-run average output nearly unchanged. The channel is saving behavior: behavioral agents perceive productivity shocks as less persistent and adjust savings less aggressively in response to fluctuations. The largest policy gaps fall in regions of the state space that are rarely visited in equilibrium, so substantial local deviations do not produce equally large aggregate consequences. The availability heuristic changes aggregate dynamics by reducing the state sensitivity of saving decisions and smoothing the equilibrium capital law of motion. These results suggest that boundedly rational expectations need not amplify business cycle fluctuations. Under-extrapolation from the availability heuristic dampens aggregate volatility, while its largest effects on saving fall in low-probability states the economy rarely visits.
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Treballs Finals del Màster d'Economia, Facultat d'Economia i Empresa, Universitat de Barcelona. Curs: 2025-2026, Tutor: Luiz Brotherhood and Bruno R. Delalibera
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TUÁREZ, Marcos. Availability Heuristic in the Real Business Cycle Model. [consulted: 6 of November of 2026]. Available at: https://hdl.handle.net/2445/231296