Year: 1979
Author: Neumann, Manfred J. M.
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 99 (1979), Iss. 4 : pp. 371–401
Abstract
This article surveys critically the literature on the integration of rational expectations into macromodels. Various objections to and extensions of the Lucas-Sargent-Wallace analysis are examined within a simple model. Also convergence problems are discussed stressing the conditioning role of information costs. Conclusions: (1) Rationality prevents market participants from identifying completely the structure; (2) it appears to be promising to combine rational expectations formation with operational hypotheses on the content and evolution of limited information positions of market participants as well as policy makers; (3) Friedman-type rules are relevant in a world of limited information rather than in the Sargent-Wallace world.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.99.4.371
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 99 (1979), Iss. 4 : pp. 371–401
Published online: 1979-04
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 31
Author Details
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