Abstract This paper examines the effects of boundedly rational expectation on the business cycle in a two-country New Keynesian model. Forecast heuristics in a closed-economy, De Grauwe’s (2011) model, is extended, and the effects of heterogeneous agents are incorporated in an open economy. In particular, the expectation formation process is constrained by waves of optimists and pessimists – the so-called “animal spirits.” As a result, the model is able to explain group behavior based on forecast performance, which has significant effects on output and inflation dynamics in the two countries. The simulation results suggest that heterogeneity in group behavior and nominal rigidities, as well as a moderate degree of international trade, amplify spillover effects on international business cycles leading to high cross-correlations in output and inflation.

中文翻译：

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开放经济中的动物精神：基于交互的商业周期方法

摘要本文研究了两国新凯恩斯模型中有限理性预期对商业周期的影响。De Grauwe（2011）模型扩展了封闭经济中的预测启发法，并且将异构代理的影响纳入开放经济中。特别是，期望形成过程受到乐观主义者和悲观主义者（所谓的“动物精神”）浪潮的约束。结果，该模型能够基于预测绩效来解释群体行为，这对两国的产出和通胀动态具有重大影响。模拟结果表明，群体行为和名义刚性的异质性以及适度的国际贸易，