- Title
- Usefulness of Adaptive and Rational Expectations in Economics
- Author(s)
- Gregory C. Chow Gregory Chow (Princeton University)
- Abstract
- This paper provides a statistical reason and strong econometric evidence for supporting the adaptive expectations hypothesis in economics. It points out why the rational expectations hypothesis was embraced by the economics profession without sufficient evidence. Finally it will summarize the conditions under which these two competing hypotheses can be used effectively.
- Creation Date
- 2011-09
- Section URL ID
- CEPS
- Paper Number
- 221
- URL
- https://gceps.princeton.edu/wp-content/uploads/2017/01/221chow.pdf
- File Function
- Jel
- E00
- Keyword(s)
- macroeconomics, adaptive expectations, rational expectations
- Suppress
- false
- Series
- 3