Rational expectations
The idea that people rationally anticipate the future and respond to what they see ahead. ...
Rational expectations undermines the idea that policymakers can manipulate the economy by systematically making the public have false expectations.
Rational Expectations
Definition: The view that economic agents predict future events in a rational way, taking into account the outcome of past policies.
Related glossary term: ...
Rational expectations
How some economists believe that people think about the future.
Rational expectations hypothesis A theory stating that people combine the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes.
rational expectations revolution a change in macroeconomic thinking during the 1970s based on the assumption that people make rational, forward-looking decisions using all the information available to them. (32) ...
Rational Expectations
School of economic theory which argues that investors are rational thinkers and can make intelligent economic decisions after evaluating all available information.
Real Estate Investment Trust (REIT) ...
Rational expectations - The theory that people understand how the economy works and learn quickly from their mistakes so that even though random errors may be made, systematic and persistent errors are not.
Rational expectations state that the market does not systematically misinterpret the valuation implications of a supply of information, but rather puts a valuation on securities that is on average correct or unbiased.
Raw materials inventory ...
Rational Expectations Theory
An economic idea that the people in the economy make choices based on their rational outlook, available information and past experiences.
Rational expectations
In forming opinion about future events, the use of all available information to assess the probabilities of the possible states of the world.
Firstly, truly rational expectations would take into account the fact that information about the future is costly. The "optimal forecast" may be the best not because it is accurate but because it is too expensive to get closer to accuracy.
The contemporary economic model of rational expectations offers perhaps the strongest critique of economic planning in its assertion that economic forecasting, both by individuals and competing businesses, is generally rational.
An investor is said to be motivated by rational expectations when an investment decision is based on all available information.
New classical economics, which emphasises the idea of rational expectations. Their original theoretical impetus was the charge that Keynesian economics lacks microeconomic foundations -- i.e. its assertions are not founded in basic economic theory.
The traditional distinction is between three different approaches to economics: Keynesian economics, focusing on demand; neoclassical economics based on rational expectations and efficient markets, ...
According to the theory of rational expectations, people form an expectation of what will happen to inflation in the future.
An option writer who does not own the number of shares required to cover the call options he or she writes.
Rational expectations ...
In particular adaptive expectations is limited if inflation is on an upward or downward trend. These limitations led to the development of rational expectations which incorporated many factors in to the decision making process.
Black Monday is thus a critical piece of evidence against the efficient market hypothesis, which assumes investors always behave according to rational expectations.
flexible prices are the key reason for the vertical slope of the long-run aggregate supply curve. This proposition is also central to the original classical theory of macroeconomics and to modern variations, including rational expectations, ...
But the expected value of their winnings is $1.
Having said this, it is a standard implementation of 'rational expectations' to assume that agents behave in response to the expected values of the distributions they face.
 See also: Banks, Expense, Funding, Stock split, Splits
  
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