Rational expectations and economic theory, Microeconomics

Assignment Help:

RATIONAL EXPECTATIONS AND ECONOMIC THEORY :

Much of undergraduate macroeconomic theory is discussed on the assumption that, in the short run, the expectations of economic agents about the future values of macroeconomic variables are given. The rationale for this treatment of expectations in macroeconomic theory can be derived from Keynes' views on the nature of expectations, including his discussion in the General Theory. While Keynes’ views on the nature of uncertainty and expectations form the basis for the writings, of many Post-Keynesian economists, most of modern macroeconomic theory treats uncertainty and expectations in a radically different manner. This latter approach is characterised in economic theory by the assumption that economic agents (households, business firms and government) have rational expectations abc, macroeconomic variables. 


Related Discussions:- Rational expectations and economic theory

Constructive political process for deficit, When Stockwell Day was leader o...

When Stockwell Day was leader of the Canadian Alliance Party (which soon became the new Conservative Party) he wrote that "the national debt is mortgaging our children's future." A

Trends in the growth of production and productivity, Trends in the Growth ...

Trends in the Growth of Production and  Productivity: From an analysis of the trends of growth of production and productivity of agricultural sector as a whole and of differen

Keynes' theory and expectations, KEYNES' THEORY AND EXPECTATIONS : Expec...

KEYNES' THEORY AND EXPECTATIONS : Expectations played a major role in Keynes' theory of the determination of aggregate output and employment in market economies in the short run

Production theory, why does gap between the ATC curve and the AVC curve dec...

why does gap between the ATC curve and the AVC curve decreases as the level of output increases

Explain the factors influencing the pes, Using commodities as an example, e...

Using commodities as an example, explain the factors influencing the PES for such goods. The basic determinants of PES are time span included and the availability of producer s

Domestic policy failures - rationale in era of globalisation, Domestic Poli...

Domestic Policy Failures: i) There is too much emphasis on "ownership" ownership of bad policies can lead to disasters. So, at times, the Fund and the Bank will need to be "p

Price, why sellers and producers keep pricess lower

why sellers and producers keep pricess lower

Question 1, You are considering whether or not to go to graduate school. We...

You are considering whether or not to go to graduate school. Well… there are many things to consider, of course, such as the type of job you would thus get, the opportunity to live

Fiscal policy, 3. Which of the following would not be an expansionary fisca...

3. Which of the following would not be an expansionary fiscal policy? a.Increased welfare payments to the poor b.Decreases in federal taxes on corporations c.A balanced budget d.I

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd