E-LOGOS - University of Economics, Prague
Faculty of Economics, University of Economics, Prague
E-LOGOS
ELECTRONIC JOURNAL FOR PHILOSOPHY - ISSN 1211-0442

The Rational Expectations Hypothesis: Theoretical Critique (2017)


Author: T. Frömmel

Email: xfrot00@vse.cz

Affiliation: Department of Economics, University of Economics Prague

Address:
Department of Economics
University of Economics Prague
Nám. W. Churchilla 1938/4
130 67 Praha 3
Czech Republic


Article type: Standard scientific article

Section: Philosophy of Science

Language: language


Abstract (english):

The rational expectations hypothesis as one of the building blocks of modern macroeconomic theory is analyzed critically in this paper. It is concluded that expectations may be rather backward-looking and adaptive since man does not search for all possible pieces of information and his learning by experience from previous mistakes may be imperfect and quite slow. Instead, mixed expectations are evaluated as a reasonable compromise.



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