Rational Expectations and Econometric Practice was first published in 1981. Minnesota Archive Editions uses digital technology to make long-unavailable books once again accessible, and are published unaltered from the original University of Minnesota Press editions.
Assumptions about how people form expectations for the future shape the properties of any dynamic economic model. To make economic decisions in an uncertain environment people must forecast such variables as future rates of inflation, tax rates, government subsidy schemes and regulations. The doctrine of rational expectations uses standard economic methods to explain how those expectations are formed.
This work collects the papers that have made significant contributions to formulating the idea of rational expectations. Most of the papers deal with the connections between observed economic behavior and the evaluation of alternative economic policies.
Robert E. Lucas, Jr., is professor of economics at the University of Chicago. Thomas J. Sargent is professor of economics at the University of Minnesota and adviser to the Federal Reserve Bank of Minnesota.
Author(s): Robert E. Lucas Jr., Thomas J. Sargent
Edition: Minnesota Archive Editions
Publisher: Univ Of Minnesota Press
Year: 1981
Language: English
Pages: 409
Contents......Page 8
Introduction......Page 12
1. Implications of Rational Expectations and Econometric Practice......Page 42
"Rational Expectations and the Theory of Price Movements"......Page 44
"Optimal Properties of Exponentially Weighted Forecasts"......Page 64
"A Note on the 'Accelerationist' Controversy"......Page 74
"Distributed Lags and Optimal Investment Policy"......Page 80
"Optimal Investment with Rational Expectations"......Page 96
"Investment under Uncertainty"......Page 108
"Formulating and Estimating Dynamic Linear Rational Expectations Models"......Page 132
"Linear Rational Expectations Models for Dynamically Interrelated Variables"......Page 168
2. Macroeconomic Policy......Page 198
"Rational Expectations, the Real Rate of Interest, and the Natural Rate of Unemployment"......Page 200
"Rational Expectations and the Theory of Economic Policy"......Page 240
"'Rational' Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule"......Page 256
"Rational Expectations and the Role of Monetary Policy"......Page 270
"Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule"......Page 302
"Price-Level Stickiness and the Feasibility of Monetary Stabilization Policy with Rational Expectations"......Page 318
"The Current State of the Policy-Ineffectiveness Debate"......Page 326
3. Econometric Methods: General......Page 334
"After Keynesian Macroeconomics"......Page 336
"Estimation of Economic Relationships Containing Latent Expectations Variables"......Page 362
"Econometric Implications of the Rational Expectations Hypothesis"......Page 370
"Estimation of Rational Expectations Models"......Page 396
