Carla Tardi is a technical editor and digital content producer with 25+ years of experience at top-tier investment banks and money-management firms. The rational expectations theory is a concept and ...

Rational expectations is a basic economic theory that originated with a paper written in 1972 by future Nobel Prize-winning economist Robert Lucas. The theory of rational expectations has been ...

Green, Jerry R., and Seppo Honkapohja. "Variance-Minimizing Monetary Policies with Lagged Price Adjustment and Rational Expectations." European Economic Review 20, nos. 1-3 (January 1983): 123–141.

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations. We assume that agents have ...

Asymmetries play an important role in many macroeconomic models. We show that assumptions on household and firm expectations play a key role in determining the effects of these asymmetries on ...

Market bubbles are like whispers at a party that turn into deafening laughter – one starts, and everyone piles in, usually because they think it’s the right thing to do. But why does this happen, and ...