Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212224 
Year of Publication: 
2012
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 21/2012
Publisher: 
Bank of Finland, Helsinki
Abstract: 
A unique Finnish household-level data from 1994 to 2009 allow us to measure how households financial expectations are related to the sub- sequent outcomes. We use the difference between the two to measure forecast errors and household optimism and link the errors to householdsĀ“ borrowing behaviour. We find that households making greatest optimistic forecast errors carry greater levels of debt and are most likely to suffer from excessive debt loads (overindebtedness). They also are less attentive to forecast errors than their pessimistic counterparts when forming their expectations for a subsequent period
Subjects: 
forecast errors
ex ante optimism
borrowing
JEL: 
D21
L20
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-808-2
Document Type: 
Working Paper

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