Adaptive expectations

Adaptive Expectations
Adaptive Expectations is the economic theory which gives importance to past events in predicting future outcomes.A common example is for predicting inflation.

Adaptive expectations
A theory of how people form their views about the future that assumes they do so using past trends and the errors in their own earlier predictions. Contrast with rational expectations.
Adverse selection ...

Adaptive Expectations Hypothesis - The theory that people base their expectations of inflation on past inflation rates.

(1)
This theory would be able to explain a certain viscosity of the variables trend as reaction to economics changes.
ii) The theory of adaptive expectations.

Demand pull inflation
Cost push inflation
Inflation induced by adaptive expectations, often termed the "wage-price spiral" ...

The agents may generalize only from past realizations in a way that we can call "adaptive expectations" or they may have other information from which they hypothesize a distribution from which the realization will be drawn.

See also: Hypothesis, Inflation Rate, Free trade, Saving, Gross domestic product