Rational expectations is an economic theory that seeks to infer the macroeconomic consequences of individuals' decisions based on all available knowledge...

begets further inflationary expectations, which beget further (built-in) inflation. The important role of rational expectations is recognized by the emphasis...

model of how expectations are formed, called rational expectations. The use of rational expectations have largely replaced adaptive expectations in macroeconomic...

He is "the father of the rational expectations revolution in economics", primarily due to his article "Rational Expectations and the Theory of Price Movements"...

Sciences in 1995 "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened...

which confounded the traditional Phillips curve. The rational expectations theory said that expectations of inflation were equal to what actually happened...

adaptive expectations may make ever-increasing errors over time has led many economists to conclude that it is better to assume rational expectations, that...

Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule, which reconciled the concept of rational expectations—developed by new classical...

Robert Lucas introduced rational expectations to macroeconomics. Prior to Lucas, economists had generally used adaptive expectations where agents were assumed...

served as an underpinning of a new class of empirical models with rational expectations and sticky prices—sometimes called new Keynesian models. In a 1993...

the importance of foundations based on microeconomics, especially rational expectations. New classical macroeconomics strives to provide neoclassical microeconomic...

macroeconomists criticized Keynesian models that did not work under rational expectations. Lucas also argued that Keynesian empirical models would not be...

Sargent's main contributions to rational expectations were these: trace the implications of rational expectations, with Wallace, for alternative monetary-policy...

Lucas critique to modeling consumption. He incorporated the idea of rational expectations into his consumption models and sets up the model so that consumers...

Rational choice modeling refers to the use of decision theory (the theory of rational choice) as a set of guidelines to help understand economic and social...

macroeconomics Homo economicus Lucas critique Efficient-market hypothesis Rational expectations Real business cycle theory Ricardian equivalence Saltwater theories...

by Thomas J. Sargent and Neil Wallace based upon the theory of rational expectations, which posits that monetary policy cannot systematically manage...

rational expectations; and was at the forefront of what came to be known as the 'rational expectations revolution'. At this time adaptive expectations was...

macroeconomic analysis usually assumes that households and firms have rational expectations. However, the two schools differ in that New Keynesian analysis...

supply and price and output changes in a simplified economy using rational expectations. It delivered a new classical explanation of the Phillips curve...

to new classical macroeconomics heavily based on the concept of rational expectations. The freshwater–saltwater distinction is largely antiquated today...

and "rational expectations" theory, led by Robert Lucas, and real business cycle theory. In contrast, the new Keynesian approach retains the rational expectations...

came under heavy criticism with the introduction of John Muth's rational expectations, which was popularized by future Nobel prize winner Robert Lucas...

information: An application of rational-expectations models”, with C. R. Plott, Journal of Political Economy, 1982. “Rational expectations and the aggregation of...

decision for themself. See rational choice theory and rational expectations for further discussion; the article on rationality widens the discussion. As...

by Robert Hall in a rational expectations model. Originally applied to consumption and income, the process of future expectations is thought to influence...

Rationality is the quality of being guided by or based on reason. In this regard, a person acts rationally if they have a good reason for what they do...

Multi-Academy free school Trust Rational Emotive Therapy, therapy now referred to as rational emotive behavior therapy Rational Expectations Theory, economic model-consistent...

classical macroeconomics and rational expectations hypothesis can explain how and why inflation targeting works. Expectations of firms (or the subjective...

paper, "Rational expectations and the role of monetary policy" in which he argued that information asymmetries would cause real effects as rational economic...