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Forecasting
P/E/342. Implications of the rational expectations theory
- WORDS:
- 1000
- DATE:
- 2006
- PRICE:
- 19.99 GBP
The paper offers a critique of Keynesian theory reviewing the theory of rational expectations (RE) by Muth which claims that by learning the patterns of economic activity one can anticipate and adapt to economic changes avoiding forecasting errors. Implications of the RE model for the government policy are examined, positive and negative aspects of the theory are outlined.
KEYWORDS: implications, rational, expectations, theory,
Other Papers On: Economic Policy
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