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...

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

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

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...

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

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

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

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

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...

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

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

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

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

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

proposition extends the model by arguing that, since people with rational expectations cannot be systematically surprised by monetary policy, monetary...

______, "Reflections on Rational Expectations," Journal of Money, Credit and Banking, Vol. 12, No. 4, Part 2: Rational Expectations (Nov., 1980), pp. 826–832...

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

two "seemingly incompatible" concepts: bounded rationality and rational expectations. Bounded rationality was developed by Herbert A. Simon, along with...

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

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...

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

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

elaborated a new approach in which rational expectations were presumed instead of the Friedmanian adaptive expectations. Due to this reformulation, the story...

of new classical macroeconomics, built around the assumption of rational expectations. In 1979, Barro defined the Ricardian equivalence theorem as follows:...