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Academic literature on the topic 'Rational expectations (Economic theory)'

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Published: 4 June 2021

Last updated: 30 July 2024

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Journal articles on the topic "Rational expectations (Economic theory)"

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Acocella, Nicola. "Rational Expectations and Economic Policy." STUDI ECONOMICI, no. 100 (October 2010): 9–18. http://dx.doi.org/10.3280/ste2010-100002.

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The introduction of rational expectations in the 1970s undermined the classical theory of economic policy laid down by Tinbergen, Theil and others. Since then rational expectations are often used as a strong argument against policy activism. However, rational expectations do not always imply policy invariance, although sometimes it happens. In fact, in certain circumstances rational expectations can enhance the policymaker's power to control an economy over time. The new theory of economic policy in a strategic context not only overcomes the Lucas critique, but states the conditions under which policymakers can be fooled by a private sector having rational expectations or, on the contrary, can manage such expectations to enhance their power to control the system.

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Duch, Raymond M., and Randolph T. Stevenson. "Context and Economic Expectations: When Do Voters Get It Right?" British Journal of Political Science 41, no. 1 (September 28, 2010): 1–31. http://dx.doi.org/10.1017/s0007123410000323.

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This article discusses the accuracy and sources of economic assessments in three ways. First, following the rational expectations literature in economics, a large sample of countries over a long time period permits tests of the unbiasedness implication of the rational expectations hypotheses (REH), revealing much variation in the accuracy of expectations and the nature of the biases in expectations. Secondly, a theory of expectation formation encompassing the unbiasedness prediction of the REH and setting out the conditions under which economic expectations should be too optimistic or too pessimistic is elucidated. Zaller’s theory of political attitude formation allows the identification of variables conditioning the accuracy of expectations across contexts, drawing a link between the thinking of political scientists and economists about expectation formation. Finally, the theoretical argument that political context impacts the accuracy of average expectations is tested.

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DJEDDI, Tarek, Said BRIKA, and Achour HAIDOUCHI. "What is the true meaning behind the stochastic hypothesis which assert that E(ε)=0 ?" Journal of Finance & Corporate Governance 1, no. 2 (December 30, 2017): 45–51. http://dx.doi.org/10.54960/jfcg.v1i2.12.

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The aim of this Paper is to examine the meaning about the classical hypothesis which claim that the error of expectation equal zero, by mentioning all theories of expectations before and after the REH. The rational expectations paradigm has dominated the field of economics ever since it was introduced some fifty years ago. Recently research in heterogeneous expectations, bounded rationality, and models of learning have gained leverage, and focus has shifted away from the rational expectations hypothesis. Despite these developments over the past few decades, the rational expectations paradigm is still very much the standard way of handling uncertainty in economic theory, and often the rationality assumption is not seriously questioned.

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Chiappori, Pierre-André. "AN INTERVIEW WITH ROGER GUESNERIE." Macroeconomic Dynamics 14, no. 3 (May 17, 2010): 388–404. http://dx.doi.org/10.1017/s1365100509990782.

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Roger Guesnerie is a prominent economic theorist. Among his many honors and distinctions, he is a Foreign Member of the American Academy of Arts and Science and an Honorary Foreign Member of the American Economic Association; he has been a President of the European Economic Association and of the Econometric Society. Currently a Professor at the College de France, he has made fundamental contributions to second-best theory and public economics, information economics, and rational expectation theory.Guesnerie was one of the founding fathers of second-best theory. His contributions to public economics, addressing issues such as nonconvex economies and especially taxation in a second-best context, remain absolute references on these topics; more recently, he has provided an in-depth analysis of issues related to climate change and global warming from a public economics perspective. Regarding contract theory, his work with Jean Jacques Laffont has considerably extended our understanding of the properties of the basic models, as well as the set of tools that economists can use to address these problems. Finally, Guesnerie's work has been influential in the critical reassessment of rational expectation theory that took place over the last decades. On one hand, he has been a prominent figure in the development of so-called “sunspot” models, which reconcile the Keynesian notion of “animal spirits” with the formal requirements of rational expectations. On the other hand, he has provided path-breaking discussions of the theoretical relevance of rational expectation theory, based on a detailed assessment of the coordination between individual expectations that is implicit in the concept. In some classes of models, Guesnerie argues, rational expectation equilibria constitute a natural outcome, because coordination can be achieved either through “eductive” reasoning (for which common knowledge of individual rationality is sufficient) or as the product of simple evolutionary or learning dynamics (and in general in both ways). In other cases, however, such arguments do not appear to support the rational expectations solution, and its relevance is therefore much less obvious. On a more institutional side, Guesnerie has created the doctoral program “Analyse et Politique Economique” at the Ecole des Hautes Etudes en Sciences Sociales; besides this program, in 1989, several related research centers in Paris merged into Delta, which Guesnerie chaired between 1992 and 2000, and then into the Paris School of Economics (PSE), at which Guesnerie is Chairman of the Board.This interview with Roger Guesnerie gives an opportunity to discuss further the current situation of economic theory and economics in general, as well as to compare the European and American traditions in economics.

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Stout, Lynn A. "Irrational Expectations." Legal Theory 3, no. 3 (September 1997): 227–48. http://dx.doi.org/10.1017/s135232520000077x.

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Rational expectations models have become a staple of economic theory and the basis for a Nobel Prize. This article argues that rational expectations analysis suffers from potentially fatal flaws that seriously undermine its value in understanding many market phenomena. Using the example of financial markets, the article illustrates how the rational expectations approach has worked to obscure, rather than to illuminate, our understanding of speculation and speculative markets. This misguidance raises problems for law and policy.

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Noviar, Helmi. "EKSPEKTASI RASIONAL: PAST, PRESENT AND FUTURE." JURNAL PERSPEKTIF EKONOMI DARUSSALAM 2, no. 1 (March 17, 2017): 80–90. http://dx.doi.org/10.24815/jped.v2i1.6649.

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This article discusses the rational expectations theory in the perspective of the appearance process and its contribution to economic thought in terms of the science and its application on the economy. The methodology in writing this paper is through literature review, generally taken from journal articles which examine from two viewpoints: from economists who initiated and supported the concept of this theory and those who opposed it. Furthermore, it also discuss about its application, particularly in terms of future economic studies. As part of the New Classical Economics, the theory pioneered by Robert E. Lucas, Jr. along with Thomas J. Sargent has provided a great contribution of empirical and multifaceted approaches, which provides a compilation of the results of the study and generalization theory by numerous macroeconomist and econometrician in Rational Expectations and Econometric Practice (1981), it quite influential on level of academic and applied economics. In other words, the rational expectation revolution is one of the important components in modern economic theory, the New Classical Economics and New Keynesian Economics.Artikel ini membahas teori ekspektasi rasional dalam perspektif proses munculnya teori ini dan kontribusinya terhadap paham pemikiran ekonomi baik dari sisi ilmu pengetahuan maupun aplikasinya dalam suatu perekonomian. Metodologi penulisan artikel ini melalui review literatur dari sumber jurnal dengan memisahkan dua sudut pandang terhadap teori rasional ekspektasi: dari sisi ekonom yang menggagas dan mendukung konsep teori ini dan yang bertentangan. Selanjutnya, dalam artikel ini juga membahas aplikasi teori ini dalam studi-studi ekonomi di masa mendatang. Sebagai bagian dari paham ekonomi klasik baru, teori yang diinisiasi oleh Robert E. Lucas, Jr. bersamaThomas J. Sargent melahirkan karya kumpulan artikel dari beberapa ahli ekonomi makro dan ekonometrika dalam Rational Expectations and Econometric Practice (1981) yang cukup berpengaruh pada tataran akademis dan aplikasi ilmu ekonomi. Dengan perkataan lain, revolusi ekspektasi rasional, merupakan salah satu komponen penting dalam teori ekonomi modern seperti halnya paham Ekonomi Keynesian baru dan Ekonomi klasik baru.

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BORZENKO, Olena. "Hypothesis of rational expectations in the international economy: developments in different countries." Fìnansi Ukraïni 2021, no. 10 (December 1, 2021): 9–12. http://dx.doi.org/10.33763/finukr2021.10.009.

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The article reveals the development of the hypothesis of rational expectations according to the theory of rational expectations (TRO), where economic entities in their forecasts make optimal use of all available information, including the assessment of government policy, to form an opinion on future developments. It turns out that expectations in the economy are very important. Rational expectations are those that can be systematically erroneous. They do not necessarily have to be performed exactly, but this is only because economic processes are subject to random fluctuations that do not depend on the actions of the state, or because the actions of the state in economic policy are unpredictable for economic agents.

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Ishbayev, G. G., A. V. Kuritsyn, and N. A. Lazareva. "Microeconomic analysis of the main ways of decomposition of the cost index." Voprosy Ekonomiki, no. 11 (November 2, 2022): 149–60. http://dx.doi.org/10.32609/0042-8736-2022-11-149-160.

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The article considers a microeconomic analysis of the main options for decomposing the value index into price and quantity change factors, as a result of which it becomes possible to interpret these options in terms of changing the expectations of either the consumer or the producer. The purpose of the study is to show that the Laspeyres, Paasche and Fisher indices have not only an estimated, but also an important content function, reflecting changes in the market expectations of economic agents. To achieve the goal, a comparative analysis of the basic formulas of the concepts of adaptive and rational expectations was carried out, as well as a meaningful analysis of the cost aggregates that are components of the Laspeyres, Paasche and Fisher indices, and a schematic diagram of the formation of adaptive and rational expectations was developed. As a methodological basis for solving the problem, the expectation theory, the analogy method, the index method of factor reversibility, and the minimum basis method were used. It is shown that Laspeyres indices are the essence of changes in adaptive expectations, Paasche indices are changes in rational expectations of producers and consumers, and Fisher indices are a joint change in adaptive and rational expectations of economic agents. It is advisable to interpret one of the main methods of decomposition of the cost index into factors as a “buying” method that meets the expectations of the consumer, another — as a “selling” method that meets the expectations of the manufacturer, a decomposition method, the third — as a “compromise” between market expectations of economic agents.

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Parke, William R., and George A. Waters. "ON THE EVOLUTIONARY STABILITY OF RATIONAL EXPECTATIONS." Macroeconomic Dynamics 18, no. 7 (June 18, 2013): 1581–606. http://dx.doi.org/10.1017/s1365100513000059.

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Evolutionary game theory provides a fresh perspective on the prospect that agents with heterogeneous expectations might eventually come to agree on a single expectation corresponding to the efficient markets hypothesis. We establish conditions under which agreement on a unique forecast is stable, but also show that persistent heterogeneous expectations can arise if those conditions do not hold. The critical element is the degree of curvature in the payoff weighting functions agents use to value forecasting performance. We illustrate our results in the context of an asset pricing model where a martingale solution competes with the fundamental solution for agents' attention.

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Young, Benjamin. "Expectations or rational expectations? A theory of systematic goal deviation." Journal of Economic Behavior & Organization 219 (March 2024): 25–37. http://dx.doi.org/10.1016/j.jebo.2024.01.003.

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Dissertations / Theses on the topic "Rational expectations (Economic theory)"

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Timmermann, Allan. "Rational expectations, learning and stock market efficiency." Thesis, University of Cambridge, 1991. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.357750.

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Carton, Joel. "Self-fulfilling expectations of cyclical volatility and learnable rational expectations behavior /." view abstract or download file of text, 1999. http://wwwlib.umi.com/cr/uoregon/fullcit?p9947970.

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Thesis (Ph. D.)--University of Oregon, 1999.
Typescript. Includes vita and abstract. Includes bibliographical references (leaves 110-113). Also available for download via the World Wide Web; free to University of Oregon users. Address: http://wwwlib.umi.com/cr/uoregon/fullcit?p9947970.

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McGlone, James M. "On rational expectations and dynamic games." Diss., Virginia Polytechnic Institute and State University, 1985. http://hdl.handle.net/10919/52306.

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We consider the problem of uniting dynamic game theory and the rational expectations hypothesis. In doing so we examine the current trend in macroeconomic literature towards the use of dominant player games and offer an alternative game solution that seems more compatible with the rational expectations hypothesis. Our analysis is undertaken in the context of a simple deterministic macroeconomy. Wage setters are the agents in the economy and are playing a non-cooperative game with the Fed. The game is played with the wage setters selecting a nominal wage based on their expectation of the money supply, and the Fed selecta the money supply based on its expectation of the nominal wage. We find it is incorrect to use the rational expectations hypothesis in conjunction with the assumption that wage setters take the Fed's choices as an exogenous uncontrollable forcing process. We then postulate the use of a Nash equilibrium in which players have rational expectations. This results in an equilibrium that has Stackleberg properties. The nature of the solution is driven by the fact that the wage setter's reaction function is a level maximal set that covers all possible choices of the Fed. One of the largest problems we encountered in applying rational expectations to a dynamic game is the interdependence of the players' expectations. This problem raises two interesting but as yet unresolved questions regarding the expectations structures of agents: whether an endogenous expectations structure will yield rational expectations; and can endogenous expectations be completely modelled. In addition to the questions mentioned above we also show that the time inconsistency problem comes from either misspecifying the constraints on the policy maker or an inconsistency in interpreting those constraints. We also show that the Lucas critique holds in a game setting and how the critique relates to the reaction functions of players.
Ph. D.

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Jackson, Aaron L. "Near-rational behavior in New Keynesian models /." view abstract or download file of text, 2002. http://wwwlib.umi.com/cr/uoregon/fullcit?p3061948.

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Thesis (Ph. D.)--University of Oregon, 2002.
Typescript. Includes vita and abstract. Includes bibliographical references (leaves 110-113). Also available for download via the World Wide Web; free to University of Oregon users.

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PANK, ROULUND Rasmus. "Essays in empirical economics." Doctoral thesis, European University Institute, 2019. http://hdl.handle.net/1814/62944.

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Defence date: 20 May 2019
Examining Board: Prof. Jerome Adda (Supervisor); Prof. Piero Gottardi,University of Essex; Prof. Rosemarie Nagel, Universitat Pompeu Fabra; Prof. Glenn W. Harrison, Georgia State University
This first chapter is co-authored with Nicolás Aragón and examines how participant and market confidence affect the outcomes in an experimental asset market where the fundamental value is known by all participants. Such a market should, in theory, clear at the expected value in each period. However, the literature has shown that bubbles often occur in these markets. We measure the confidence of each participant by asking them to forecast the one-period-ahead price as a discrete probability mass distribution. We find that confidence not only affects price-formation in markets, but is important in explaining the dynamics of bubbles. Moreover, as traders’ confidence grows, they become increasingly more optimistic, thus increasing the likelihood of price bubbles. The second chapter also deals with expectations and uncertainty, but from a different angle. It asks how increased uncertainty affects economic demand in a particular sector, using a discrete-choice demand framework. To investigate this issue I examine empirically to what extent varying uncertainty affects the consumer demand for flight traffic using us micro demand data. I find that the elasticity of uncertainty on demand is economically and statistically significant. The third chapter presents a more practical side to the issue examined in the first chapter. It describes how to elicit participants’ expectations in an economic experiment. The methodology is based on Harrison et al. (2017). The tool makes it easier for participants in economic experiments to forecast the movements of a key variable as discrete values using a discrete probability mass distribution that can be “drawn” on a virtual canvas using the mouse. The module I wrote is general enough that it can be included in other economic experiments.
1. Certainty and Decision-Making in Experimental Asset Markets 1.1. Literature Review 1.2. Hypotheses 1.3. Experimental Design 1.3.1. The asset market 1.3.2. Eliciting traders’ beliefs 1.3.3. Risk, Ambiguity and Hedging 1.4. Overview of experimental data 1.4.1. Summary of the trade data 1.4.2. Expectation data 1.5. Results 1.5.1. Predictions and forecast 1.5.2. Convergence of expectations 1.5.3. Market volatility and initial expectations 1.5.4. Explanatory power of certainty on price formation 1.6. Conclusion 2. The impact of macroeconomic uncertainty on demand: 2.1. Introduction 2.2. Literature review 2.3. A model of demand for flights 2.3.1. Demand 2.3.2. Firms 2.4. Data 2.4.1. The characteristics of the products 2.4.2. Market and macroeconomic characteristics 2.4.3. Instruments 2.4.4. Product shares 2.5. Results 2.6. Conclusion 3. forecast.js: a module for measuring expectation in economic experiments 3.1. Background 3.1.1. Elicitating Expectations in Experimental Finance 3.1.2. Eliciting a Distribution of Beliefs: Theoretical Considerations 3.2. Using the forecast.js module 3.2.1. Calibration 3.2.2. Accessing the forecast data 3.3. The generated data 3.3.1. Example of individual expectations 3.3.2. Timing Considerations 3.3.3. Prediction precision over time 3.4. Conclusion Bibliography A. Appendix to Chapter 1 A.1. Further robustness checks A.1.1. Additional graph for Hypothesis 2 A.1.2. Increased agreement with the Bhattacharyya coefficient A.1.3. Additional robustness checks for Hypothesis 3 A.2. Instructions for experiment A.2.1. General Instructions A.2.2. How to use the computerized market A.3. Questionnaire A.3.1. Before Session A.3.2. After Session B. Appendix to Chapter 3 99 B.1. Robustness check of precision B.2. Using forecast.js in a standalone HTML page B.3. Using forecast.js with oTree B.3.1. Setting up models.py B.3.2. The pages.py file B.3.3. Display forecast modules on the pages

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Kim, Yŏng-yong. "Exchange rate determination under rational expectations : an empirical investigation /." Connect to resource, 1985. http://rave.ohiolink.edu/etdc/view.cgi?acc%5Fnum=osu1264773152.

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Wenzelburger, Jan. "Learning in economic systems with expectations feedback." Berlin Heidelberg New York Springer, 2006. http://deposit.ddb.de/cgi-bin/dokserv?id=2668403&prov=M&dok_var=1&dok_ext=htm.

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RAST, Sebastian. "Essays on the dynamics of inflation expectations." Doctoral thesis, European University Institute, 2022. http://hdl.handle.net/1814/74528.

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Defence date: 11 May 2022
Examining Board : Prof. Evi Pappa (Universidad Carlos III Madrid); Prof. Leonardo Melosi (Federal Reserve Bank of Chicago); Dr. Philippe Andrade (Federal Reserve Bank of Boston); Dr. Marek Jarociński (European Central Bank)
This thesis investigates the dynamics of inflation expectations with a particular focus on survey data. It aims to further the understanding of what drives inflation expectations and what are the implications of changes in inflation expectations for economic choices. The first chapter examines to what extent monetary policy moves household inflation expectations. More specifically, I study the effect of different types of monetary policy announcements on household inflation expectations based on micro data from a survey of German households. As unique feature, interviews of the survey were conducted both shortly before and after monetary policy events. This timing provides a natural experiment to identify the immediate effects of policy announcements on household inflation expectations. In contrast to most existing studies, the availability of the survey over a period of 15 years also allows me to exploit the time-series dimension to estimate how policy announcements affect household inflation expectations over the medium-term. I find that policy rate announcements lead to quick and significant adjustments in household inflation expectations with the effect peaking after half a year. Announcements about forward guidance and quantitative easing, on the other hand, have only small and delayed effects. My results suggest that monetary policy announcements can influence household expectations but further improvements in communication seem to be necessary to reach the general public more effectively. In particular, in an environment where policy rates are constrained by the effective lower bound, it may be very hard for central banks to influence household expectations. In the second chapter, joint with Evi Pappa and Alejandro Vicondoa, we focus on expectations about inflation in the medium to long run and study the implications of changes in these expectations for households’ economic choices. We identify in a SVAR shocks that best explain future movements in different measures of underlying inflation at a five-year horizon and label them as news augmented shocks to underlying inflation. Independently of the measure used, such shocks raise the nominal rate and inflation persistently, while they induce mild and short-lived increases in economic activity. The extracted inflation shocks have differential distributional effects. They increase significantly and persistently the consumption of mortgagors and homeowners. Differently from the traditional monetary policy disturbances, news augmented shocks to underlying inflation induce a positive wealth effect for mortgagors and homeowners, driven by a reduction in the real mortgage payments and a persistent increase in real house prices that they induce. The third chapter, joint with Jonas Fisher and Leonardo Melosi, is also about long-run inflation expectations but in this case the focus is on professional forecasters. We use panel data from the U.S. Survey of Professional Forecasters to estimate a model of individual forecaster behavior in an environment where inflation follows a trend-cycle time series process. Our model allows us to estimate the sensitivity of forecasters’ long-run expectations to incoming inflation and news about future inflation, and measure the coordination of beliefs about future inflation. We use our model of individual forecasters to study average long-run inflation expectations. Short term changes in inflation have small effects on average expectations; the sensitivity to news is over twice as large, but is still relatively small. These findings provide a partial explanation for why the anchoring and subsequent de-anchoring of average inflation expectations over 1991 to 2020 were such long-lasting episodes. Our model suggests coordination of beliefs also played a role, slowing down but not preventing the pull on average expectations from inflation running persistently below target. We apply our model to the case of a U.S. central banker setting policy in September 2021. Our results suggest the high inflation readings of mid-2021 would have to be followed by overshooting of the Fed’s target generally at the high end of the Fed’s Summary of Economic Projections to re-anchor long term expectations at their pre-Great Recession level.
1 Central Bank Communication with the General Public: Survey Evidence from Germany 1.1 Introduction 1.2 Data and descriptive evidence 1.3 Identification approach and main results 1.4 Discussion 1.5 Inflation expectations and consumer spending 1.6 Conclusion 2 Uncovering the heterogeneous effects of news shocks to underlying inflation 32 2.1 Introduction 2.2 Identifying News Shocks to Underlying Inflation 2.3 Macroeconomic Effects 2.4 Estimation of Heterogeneous Effects 2.5 Comparison with Monetary Policy Shocksclusion 3 Anchoring long-run inflation expectations in a panel of professional forecasters 3.1 Introduction 3.2 Relation to the literature 3.3 The Model 3.4 Estimation 3.5 Data 3.6 Estimates 3.7 Inflation expectations through the lens of the model 3.8 Re-Anchoring U.S. Inflation Expectations 3.9 Conclusion -- References -- A Appendix to Chapter 1 -- A.1 GfK household survey -- A.2 Monetary policy surprises -- A.3 Additional event study results -- A.4 Additional local projection results -- A.5 Dynamic effects based on pseudo panel approach -- A.6 The effects on quantitative inflation expectations -- A.7 Financial market responses -- B Appendix to Chapter 2 -- B.1 Data Appendix -- B.2 Series of underlying inflation -- B.3 Correlation with monetary policy/inflation target shocks -- B.4 Validation of the Identified Shock -- B.5 IRFs Additional Variables -- B.6 VAR Robustness Analysis -- B.7 LP IRFs of VAR variables -- B.8 VAR IRFs of consumption responses by housing tenure -- B.9 Additional LP results -- B.10 Alternative dimensions of heterogeneity -- B.11 Robustness of Baseline Heterogeneous Effects -- B.12 Comparison with monetary policy shocks -- C Appendix to Chapter 3 -- C.1 Definition of matrices in subsection 3.3.2 and section 3.4 -- C.2 Model derivations -- C.3 Initial conditions for estimation -- C.4 Selection of forecasters -- C.5 Volatility of Expectations -- C.6 Historical decomposition -- C.7 Robustness of panel estimation -- C.8 Projection exercise

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Tzavalis, Elias. "Tests and applications of the rational expectations hypothesis of the term structure of interest rates." Thesis, London Business School (University of London), 1993. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.361604.

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Branch, William A. "Three essays on the dynamics and empirics of rationally heterogeneous expectations /." view abstract or download file of text, 2001. http://wwwlib.umi.com/cr/uoregon/fullcit?p3018358.

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Thesis (Ph. D.)--University of Oregon, 2001.
Typescript. Includes vita and abstract. Includes bibliographical references (leaves 99-102). Also available for download via the World Wide Web; free to University of Oregon users.

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Books on the topic "Rational expectations (Economic theory)"

1

Hansen, Lars Peter. Rational expectations econometrics. Boulder: Westview Press, 1991.

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Minelli, Enrico. Rational expectations in games. Louvain-la-Neuve: CIACO, 1995.

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Luzenberger, Raul De. Nuova macroeconomia classica e meccanismo di mercato: Certezze ed incertezze negli equilibri di aspettative razionali : aspetti teorici ed empirici. Napoli: Edizioni scientifiche italiane, 1990.

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Hashem, Pesaran M. The limits to rational expectations. Oxford, UK: B. Blackwell, 1988.

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Labinski, P. F. Macroeconomics: A rational expectations approach. 3rd ed. Needham Heights, MA: Ginn Press, 1992.

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Mishkin, Frederic S. The rational expectations revolution: A review article of: Preston J. Miller, ed.: The rational expectations revolution, readings from the front line. Cambridge, MA: National Bureau of Economic Research, 1995.

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Broze, Laurence. Reduced forms of rational expectations models. Chur [Switzerland]: Harwood Academic Publishers, 1990.

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Pesaran, Hashem. The limits to rational expectations. Oxford: Basil Blackwell, 1987.

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E. W. M. T. Westerhout. The empirical implications of the rational expectations hypothesis. [Hague]: Ministry of Economic Affairs, Directorate for Economic Policy, 1991.

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Hansen, Lars Peter. Beliefs, doubts and learning: Valuing economic risk. Cambridge, Mass: National Bureau of Economic Research, 2007.

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Book chapters on the topic "Rational expectations (Economic theory)"

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Cyert, Richard M., and Morris H. DeGroot. "Rational Expectations." In Bayesian Analysis and Uncertainty in Economic Theory, 171–85. Dordrecht: Springer Netherlands, 1987. http://dx.doi.org/10.1007/978-94-009-3163-3_13.

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Bray, Margaret, and David M. Kreps. "Rational Learning and Rational Expectations." In Arrow and the Ascent of Modern Economic Theory, 597–625. London: Palgrave Macmillan UK, 1987. http://dx.doi.org/10.1007/978-1-349-07239-2_19.

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Marwala, Tshilidzi, and Evan Hurwitz. "Rational Choice and Rational Expectations." In Artificial Intelligence and Economic Theory: Skynet in the Market, 27–40. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-66104-9_3.

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Leijonhufvud, Axel. "Rational Expectations and Monetary Institutions." In Monetary Theory and Economic Institutions, 44–65. London: Palgrave Macmillan UK, 1987. http://dx.doi.org/10.1007/978-1-349-08781-5_3.

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Sargent, T. J., and N. Wallace. "Rational Expectations and the Theory of Economic Policy." In Essential Readings in Economics, 366–82. London: Macmillan Education UK, 1995. http://dx.doi.org/10.1007/978-1-349-24002-9_20.

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Beinsen, Lutz, and Ulrike Leopold-Wildburger. "Towards Bounded Rationality within Rational Expectations — Some Comments from an Economic Point of View." In Game Theory, Experience, Rationality, 141–52. Dordrecht: Springer Netherlands, 1998. http://dx.doi.org/10.1007/978-94-017-1654-3_12.

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De Grauwe, Paul, Michele Fratianni, and Mustapha K. Nabli. "The Theory of Output and Inflation with Rational Expectations in Open Economies." In Exchange Rates, Money and Output, 7–21. London: Palgrave Macmillan UK, 1985. http://dx.doi.org/10.1007/978-1-349-17699-1_2.

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Davidson, Paul. "Shackle and Keynes vs. Rational Expectations Theory and the Role of Time — Liquidity and Financial Markets." In Unknowledge and Choice in Economics, 64–80. London: Palgrave Macmillan UK, 1990. http://dx.doi.org/10.1007/978-1-349-08097-7_5.

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Davidson, Paul. "Shackle and Keynes vs Rational Expectations Theory on the Role of Time, Liquidity and Financial Markets." In Inflation, Open Economies and Resources, 144–58. London: Palgrave Macmillan UK, 1991. http://dx.doi.org/10.1007/978-1-349-11516-7_14.

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Hendry, David F. "Rational Expectations." In Economic Ideas You Should Forget, 77–78. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-47458-8_32.

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Conference papers on the topic "Rational expectations (Economic theory)"

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Frömmel, Tomáš. "THE AUSTRIAN BUSINESS CYCLE THEORY, RATIONAL EXPECTATIONS AND HISTORICAL TIME." In 7th Economics & Finance Conference, Tel Aviv. International Institute of Social and Economic Sciences, 2017. http://dx.doi.org/10.20472/efc.2017.007.002.

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Alperen, Ümit, and Ahmet Günay. "Trade Expectations Theory and China’s Rising: Towards a Peaceful Future?" In International Conference on Eurasian Economies. Eurasian Economists Association, 2014. http://dx.doi.org/10.36880/c05.00907.

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Since mid-1990, it has been discussed that China’s economic rise would affect political space. There are some worries that the “rejuvenation” of China as economic, politic, geo-strategic power could challenge to the current international system. Hence this rising has been called “China threat theory” and it could cause a conflict in international system. According to realist school, China’s peaceful rise is almost impossible, so China will threat to the current international system and clash with hegemonic power. They also provide some empirical evidence from history. On the other hand, Liberals expresses that trade provides valuable benefits to any particular states. So, China as a dependent state should avoid from war or conflict, since peaceful trading gives it all the benefits of close ties without any of the costs and risks of war. This paper attempts to examine ‘China’s peaceful rise’ based on interdependence and trade expectations theory within the context of international political economy. To analyze whether China threat or not to the world, we have to know the relationship between economic and politics. Trade expectations theory could explain the rise of China with establishes bridge between incompetence of realist and liberal theories. According to trade expectations theory, the rise of China will be peaceful because of China’s expectations as economically are positive. For this reason, China as a rational actor chooses win-win without risk instead of win-lose or lose-lose. If China’s expectations turn into negative in future, its policies could change from cooperation to conflict.

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Zhang, Jiawen. "Analysis of Real Estate Market and Regulation Policy Recommendations - Based on Game Theory and Rational Expectation Theory." In Proceedings of the 2019 4th International Conference on Financial Innovation and Economic Development (ICFIED 2019). Paris, France: Atlantis Press, 2019. http://dx.doi.org/10.2991/icfied-19.2019.17.

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Acet, Hakan, Zeynep Karaçor, and Özlem Alkan. "Macroeconomic Models: Assessment of the 2008 Financial Crisis in the Framework of Dynamic Stockastic General Equilibrium and Agent Based Modeling." In International Conference on Eurasian Economies. Eurasian Economists Association, 2018. http://dx.doi.org/10.36880/c10.02137.

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As a result of economic crisis occurred in the mid-1970s, the macroeconomic models that were exist at that time had been criticized about their validity, and then the dynamic Stochastic general equilibrium analysis had been developed accordingly. Dynamic Stochastic general equilibrium models, which combine microeconomic foundations by assuming that households or firms are behaving optimally with rational expectations against scarce resources, have been also criticized for their adequacy with the onset of the 2008 crisis. After this crisis, agent-based modeling attracted attention and started to be adopted more in the literature. In this study, 2008 crisis will be evaluated by comparing both models.

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Miki, Koki, Shigeru Tabeta, and Katsunori Mizuno. "A Preliminary Study on the Site Selection of Offshore Wind Power Generation." In ASME 2020 39th International Conference on Ocean, Offshore and Arctic Engineering. American Society of Mechanical Engineers, 2020. http://dx.doi.org/10.1115/omae2020-18228.

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Abstract In Japan, which has a wide EEZ, there are high expectations for the potential of MRE. The spread of MRE may produce various effects such as eliminating dependence on other countries for energy supply and revitalizing local economies through business entry. On the other hand, consensus building with various stakeholders at the time of project development is considered a major obstacle to dissemination. In order to promote commercialization of the MRE development, not only the evaluation of economic feasibility but also various aspects such as environmental conservation and coexistence with other industries should be integrated and evaluated. A rational system should be established to select suitable sites that all stakeholders can be convinced. In this study, especially on offshore wind power generation, existing studies on selecting suitable sites in consideration of economic, environmental, and social aspects were investigated as well as the related efforts of each country to review the current status of marine spatial planning and extract issues for MRE deployment in Japan. A preliminary economic evaluation for offshore wind power generation around Japan was also carried out.

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Tasevska, Ivona. "EMPIRICAL RESEARCH ON THE INFORMATION EFFICIENCY OF THE MACEDONIAN STOCK EXCHANGE." In Economic and Business Trends Shaping the Future. Ss Cyril and Methodius University, Faculty of Economics-Skopje, 2022. http://dx.doi.org/10.47063/ebtsf.2022.0027.

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One of the basic hypotheses in modern finance that defines financial markets is the Efficient Market Hypothesis. The existence of information efficient markets, where all information is incorporated in the price of financial instruments is the basis of rational economic theory. There may be an upward or downward trend in the financial markets, but after the inclusion of new information in the financial instruments, they would stabilize until the next new information. In addition to the definition of efficient markets, the hypothesis of random walk has a significant application, which explains that the market cannot be beaten and that prices and returns move in a random upward or downward direction. The paper includes two methodologies to confirm the efficiency of the financial markets. The first research was conducted in order to confirm the hypothesis of a random walk implementing a coefficient of variance test. The test was conducted using a large series of data of the returns’ movement of stock exchange indices on the Macedonian, Belgrade, Zagreb, Sofia and Ljubljana Stock Exchange, as well as the American S&P500 index. The second research which is including the model of market multipliers was conducted for the most liquid stocks on the Macedonian Stock Exchange and selected stocks from the US Stock Exchange Markets, in order to show the underestimation or overestimation in relation to the market value of stocks, thus to show the sentiment that investors have when trading a certain type of stock. The results of the research show that the regional financial markets, as well as the domestic ones, do not follow the random walk, giving an opportunity to the possibility of using alternative behavioral approaches to explain the reasons for the deviation. For the second survey, where significant differences in the fundamental and market value of the stocks appear, the reason for the deviation is the expectations of investors.

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Aumann, Robert J. "Rational expectations in games." In 2009 International Conference on Game Theory for Networks (GameNets). IEEE, 2009. http://dx.doi.org/10.1109/gamenets.2009.5137372.

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Bernāts, Jānis, Agnese Rusakova, and Elmīra Zariņa. "Clash of Giants – the Change of Internal Higher Education Governance in Latvia." In 79th International Scientific Conference of University of Latvia. University of Latvia, 2021. http://dx.doi.org/10.22364/htqe.2021.61.

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Globalization, the transfer to knowledge society exposes the environment of higher education institutions (HEIs) to increasingly complex operating conditions. The universities have to address additional demanding tasks with often-staggering public funding at their disposal. The paper aims to depict the interaction of government – managers – and higher education (HE) sector – employees – in the context of recent university governance reforms, which in its essence is another manifestation of managerialist policy followed by the government. The paper starts with contextual information on the HE system in Latvia and its antecedently limited public funding. It then touches the introduction of the performance-based funding model. The review of the funding model came as a reaction to dramatic public funding cuts within the higher education sector that were triggered by the economic crisis 2009-2012. The paper outlines the expectations of the higher education sector that additional public funding will be invested as soon as the new funding model is implemented. However, quite surprisingly for the higher education sector, the newly elected government decides to reform the internal governance of public higher education institutions instead. The depicted context is analyzed against the concept of managerialism and its influence on the higher education sector, specifically on the deterioration of collegiality as the traditional form of university governance. The paper explains, why the plans to reform the university governance in Latvia by introducing university boards with external stakeholders represented there have been met ambiguously by the higher education sector. The authors seek to answer the seemingly irrational series of actions taken by the Latvian government and do so referring to phenomena of managerial ideology, as well as cautions against the rule of uncompromising, forthright managerialism within the public sector. The article finds, however, that pure collegiality is no longer viable in the higher education sector in Latvia, and different manifestations of managerialism are there to stay in the higher education sector. Therefore, ways need to be found to adopt and draw benefits from the induced changes. Understanding the rational reasons behind seemingly irrational reforms introduced by the government is the first step in this direction. The next step, but this would be then the subject of further researches, would be to detect the conditions in which the incoming managerialism may undermine or reinforce the quality of higher education.

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Fukuda, Shuichi. "Navigating the Uncharted Waters: An Emotional Engineering Approach to Decision Making." In ASME 2012 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference. American Society of Mechanical Engineers, 2012. http://dx.doi.org/10.1115/detc2012-70830.

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Although there are many approaches to decision making, most of them are tools for the Closed World, and you can make decisions before you sail out. But the world we are living in now is an Open World, where there is no chart. We have to make decisions while we are navigating. Economists, Simon and Keynes, say that in a Closed World economic agents make decisions rationally, but in an Open World they rely on emotion. This paper describes that by introducing directed graph and declarative programming techniques, we can simulate emotion-driven decision making. This approach has several advantages. One important one is we can introduce emotion into quality function deployment. Quality is not just function requirements. Quality is nothing other than customers’ expectations. And emotions are closely related to their expectations and satisfactions. Another advantage is that as engineering needs more and more diverse pieces of knowledge, it is becoming increasingly difficult to see the whole picture. But this approach permits decision making in your own way and still meeting customers’ expectations adequately.

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Heidarieh, M., and H. R. Momeni. "Using rational Lyapunov function for estimating the domain of attraction of a nonlinear economic model : An LMI approach." In 2009 41st Southeastern Symposium on System Theory (SSST). IEEE, 2009. http://dx.doi.org/10.1109/ssst.2009.4806822.

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Reports on the topic "Rational expectations (Economic theory)"

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Rochet, Jean-Charles. Optimal Sovereign Debt: An Analytical Approach. Inter-American Development Bank, October 2006. http://dx.doi.org/10.18235/0010867.

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This paper develops a model of sovereign debt where governments are myopic. Instead of focusing on the incentives to repay, as in most of the theoretical literature on the topic (which assumes implicitly that governments have long-term objectives), I therefore consider that governments always repay when they can, but also borrow as much as possible. without paying attention to the burden of future repayments. The pattern of debt is then only determined by the willingness of international investors to lend to the country. I characterize the Rational Expectations Equilibria of the credit market. These equilibria behave like rational bubbles: international investors lend a lot because they anticipate that other investors will lend again in the future. Capital flows are procyclical: the government borrows a fixed proportion of its income until a sudden stop occurs, generating default and an economic crisis. I suggest possible remedies to the high volatility of public expenditures that is generated by such borrowing patterns.

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Llosa, Gonzalo, and Vicente Tuesta. Determinacy and Learnability of Monetary Policy Rules in Small Open Economies. Inter-American Development Bank, December 2006. http://dx.doi.org/10.18235/0010968.

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This paper evaluates under which conditions different Taylor-type rules lead to determinacy and expectational stability (E-stability) of rational expectations equilibrium in a simple New Keynesian small open economy model, developed by Gali and Monacelli (2005). In particular, we extend the Bullard and Mitra (2002) results of determinacy and E-stability in a closed economy to this small open economy framework. Our results highlight an important link between the Taylor principle and both determinacy and learnability of equilibrium in small open economies. More importantly, the degree of openness coupled with the nature of the policy rule adopted by the monetary authorities might change this link in important ways. A key finding is that, contrary to Bullard and Mitra, expectations-based rules that involve the CPI and/or the nominal exchange rate limit the region of E-stability and the Taylor Principle does not guarantee E-stability. We also show that some forms of managed exchange rate rules can help to alleviate problems of both indeterminacy and expectational instability, yet these rules might not be desirable since they promote greater volatility in the economy.

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Bano, Masooda, and Daniel Dyonisius. Community-Responsive Education Policies and the Question of Optimality: Decentralisation and District-Level Variation in Policy Adoption and Implementation in Indonesia. Research on Improving Systems of Education (RISE), August 2022. http://dx.doi.org/10.35489/bsg-rise-wp_2022/108.

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Decentralisation, or devolving authority to the third tier of government to prioritise specific policy reforms and manage their implementation, is argued to lead to pro-poor development for a number of reasons: local bureaucrats can better gauge the local needs, be responsive to community demands, and, due to physical proximity, can be more easily held accountable by community members. In the education sector, devolving authority to district government has thus been seen as critical to introducing reforms aimed at increasing access and improving learning outcomes. Based on fieldwork with district-level education bureaucracies, schools, and communities in two districts in the state of West Java in Indonesia, this article shows that decentralisation has indeed led to community-responsive policy-development in Indonesia. The district-level education bureaucracies in both districts did appear to prioritise community preferences when choosing to prioritise specific educational reforms from among many introduced by the national government. However, the optimality of these preferences could be questioned. The prioritised policies are reflective of cultural and religious values or immediate employment considerations of the communities in the two districts, rather than being explicitly focused on improving learning outcomes: the urban district prioritised degree completion, while the rural district prioritised moral education. These preferences might appear sub-optimal if the preference is for education bureaucracies to focus directly on improving literacy and numeracy outcomes. Yet, taking into account the socio-economic context of each district, it becomes easy to see the logic dictating these preferences: the communities and the district government officials are consciously prioritising those education policies for which they foresee direct payoffs. Since improving learning outcomes requires long-term commitment, it appears rational to focus on policies promising more immediate gains, especially when they aim, indirectly and implicitly, to improve actual learning outcomes. Thus, more effective community mobilisation campaigns can be developed if the donor agencies funding them recognise that it is not necessarily the lack of information but the nature of the local incentive structures that shapes communities’ expectations of education. Overall, decentralisation is leading to more context-specific educational policy prioritisation in Indonesia, resulting in the possibility of significant district-level variation in outcomes. Further, looking at the school-level variation in each district, the paper shows that public schools ranked as high performing had students from more privileged socio-economic backgrounds and were catering for communities that had more financial resources to support activities in the school, compared with schools ranked as low performing. Thus, there is a gap to bridge within public schools and not just between public and private schools.

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Ganimian, Alejandro, and Emiliana Vegas. Theory and Evidence on Teacher Policies in Developed and Developing Countries. Inter-American Development Bank, August 2013. http://dx.doi.org/10.18235/0012277.

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The past decade has seen the emergence of numerous rigorous impact evaluations of teacher policies. This paper reviews the economic theory and empirical evidence on eight teacher policy goals: (1) setting clear expectations for teachers; (2) attracting the best into teaching; (3) preparing teachers with useful training and experience; (4) matching teachers' skills with students' needs; (5) leading teachers with strong principals; (6) monitoring teaching and learning; (7) supporting teachers to improve instruction; and (8) motivating teachers to perform. The paper also discusses key concepts and methods in econometrics to understand existing studies and offers some directions for future research.

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