This Project Grant award from the National Science Foundation (NSF) Social, Behavioral, and Economic Sciences (SBE) program (CFDA 47.075) provides $233,514 to The Johns Hopkins University to conduct collaborative research on "Diagnostic Expectations, Uncertainty, and Macroeconomic Fluctuations."
The research consists of three main projects. The first project explores the link between representativeness and uncertainty, introducing a "smooth diagnostic expectations" framework that connects the diagnostic expectations and uncertainty literatures. The second project develops quantitative business cycle models leveraging insights from the smooth diagnostic expectations approach to account for key business cycle properties like asymmetry, countercyclical micro and macro volatility. The third project focuses on actionable implications, examining how reducing uncertainty faced by decision-makers can stabilize psychological biases and improve macroeconomic outcomes. This award runs from September 1, 2024 to August 31, 2027.