These expectations are based on full information and are rational.
Muth introduces the rational expectations hypothesis in economics.
And Lucas himself would admit upon receivinghis Nobel prize: "The Keynesian orthodoxy hasn't been replacedby anything yet." (2)
There are two main parts to rational expectations.
It therefore fits the looseeconomic criterion of rationality.
Called "rational expectations," the theory is winning adherents in academic and financial circles and represents perhaps the boldest challenge to contemporary economic thinking.
the rational expectations hypothesis; the assumption of continuous ..
Rational expectations economists contend that the recent decade of economic "stagflation"--high inflation, high unemployment, and low productivity--was a result, in part, of people having learned from their mistakes of the 1960s.
THE RATIONAL EXPECTATIONS REVOLUTION THEORY ..
of Indian Culture and Business Management » Title: Author: Kakali Kanjilal Address: International Management Institute (IMI), Delhi, B-10, Qutab Institutional Area, Tara Crescent, New Delhi-16, India Abstract: This article tests the validity of rational expectations hypothesis (REH) for government securities market in India for the period Jul-97 through Feb-04.
the rational expectation school ..
Definition of Rational Expectations Hypothesis: Rational expectations hypothesis is the idea that economic agents use all available information, including information on economic relations, in forming expectations about the future.