Consumer expectations: micro foundations and macro impact

"Expected outcomes offer no new information. Results that are unexpected challenge orthodox views. While most discrepancies are resolved upon detailed examination, the few that remain have the potential to lead to a new understanding of human behavior. Over the past four decades, I have held a unique position that has allowed me to directly observe how people form and act on their economic expectations as the director of the University of Michigan's consumer sentiment surveys. I initially resisted the startling implications of my observations as they were in inconsistent with accepted theories in economics and psychology"--

Cover -- Half-title -- Title page -- Copyright information -- Dedication -- Table of contents -- List of Figures -- List of Tables -- Preface -- 1 Expectations and the Macroeconomy -- Formation of Expectations -- A More Realistic Paradigm -- Full Mental Faculties -- Rationality Is Context Sensitive -- Economics of Recessions -- Recessions Are Irrational -- The Powerful Consumer -- The Urge to Act -- Paradigm Shift -- Part I The Formation of Expectations -- 2 Conventional Theories of Expectations -- The Keynesian Mandate -- What Is Past Is Prologue -- Rational Expectations Hypothesis -- How Should Rationality Be Tested? -- Private versus Public Information -- Empirical Models -- Importance of Accuracy -- Costs and Benefits of Updated Expectations -- Refinements of Expectations Models -- Reification of Economic Data -- Data on Economic Expectations -- Are Expectations Backward or Forward Looking? -- Rational Expectations: Economists versus Consumers -- Evidence of Cognitive Limitations -- Unemployment Expectations -- Weak Evidence for Cognitive Limitations -- 3 Private and Public Sources of Economic Information -- Survey Methodology -- Knowledge of Official Data on the Economy -- Re…