Overall, the research in ExSIDE contributes to four scientific work packages (WPs).
Policy Design under Consideration of Expectation Dynamics
This WP has a strong policy orientation and focusses on the optimal design of fiscal and monetary policy under proper consideration of the feedback between policies and the endogenous evolution of expectations in the population. The policy analyses are carried out in the framework of calibrated models in which individuals’ expectations are heterogeneous and evolve according to processes with empirical foundations. The analysis in this WP to a large extend relies on a combination of numerical methods and agent-based simulation.
Social Influence and Opinion Diffusion
This WP focusses on the analysis of social influence dynamics in different economic settings and the development of expectation dynamics models incorporating social influence effects. In particular, it is studied how opinion diffusion and social contagion are affected by the presence of anti-conformist agents as well as by forward looking individuals. A key issue in this respect is in how far the emergence of homophily and segregation in networks is fostered by the existence of forward-looking individuals.