Rational Expectations in Urban Economics∗

Resisting and Accommodating Thomas Sargent Putting Rational Expectations Economics through the Mangle of Practice

Rational Expectations and Inflation Third Edition

this collection of essays uses the lens of rational expectations theory to examine how governments anticipate and plan for inflation, and provides insight into the pioneering research for which thomas sargent was awarded the 2011 nobel prize in economics. rational expectations theory is based on the simple premise that people will use all the information available to them in making economic dec...

Optimal Control and Stochastic Simulation of Large Nonlinear Models with Rational Expectations by Ray C. Fair Cowles Foundation Paper No. 1076 Cowles Foundation for Research in Economics

This paper presents a computationally fesible procedure for the optimal control and stochastic simulation of large nonlinear models with rational expectations under the assumption of certainty equivalence.

DEPARTMENT OF ECONOMICS WORKING PAPER SERIES Targets and Lags in a Two-Equation Model of US Stabilization

A simple model of activist macroeconomic policy derives a reaction function by assuming that rational governments have performance objectives, but are constrained by the Phillips curve. Although not formally modeled, governments apply a variety of instruments to influence inflation and output, in addition to monetary policy these including fiscal policy, bailouts and exchange rates. Our econome...

Testing for Stochastic Non- Linearity in the Rational Expectations Permanent Income Hypothesis

The Rational Expectations Permanent Income Hypothesis implies that consumption follows a martingale. However, most empirical tests have rejected the hypothesis. Those empirical tests are based on linear models. If the data generating process is non-linear, conventional tests may not assess some of the randomness properly. As a result, inference based on conventional tests of linear models can b...