02109cas a2200265 a 4500 AALejournalIMF011928 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475504354 1018-5941 BD-DhAAL BD-DhAAL Walker, Todd. Fiscal Foresight and Information Flows / Todd Walker, Eric Leeper, Susan Yang. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (65 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students News - or foresight - about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react. Using tax policies as a leading example of foresight, simple theory makes transparent the economic behavior and information structures that generate non-fundamental equilibria. Econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes; biases are quantitatively important when two canonical theoretical models are taken as data generating processes. Both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows. Different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non-uniqueness problem endemic to moving average representations. Mode of access: Internet Leeper, Eric. Yang, Susan. IMF Working Papers; Working Paper ; No. 2012/153 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/153/001.2012.issue-153-en.xml IMF e-Library