Search results
The rational expectations hypothesis thus puts forward a means of forming expectations which is based on agents taking account of all necessary available information to make their forecasts. The information is used efficiently to determine the process which generates the variable in question and the process is then used to formulate an expected ...
Business portal. v. t. e. (Production and national income) Macroeconomics takes a big-picture view of the entire economy, including examining the roles of, and relationships between, firms, households and governments, and the different types of markets, such as the financial market and the labour market. Macroeconomics is a branch of economics ...
Law of total expectation. The proposition in probability theory known as the law of total expectation, [1] the law of iterated expectations [2] ( LIE ), Adam's law, [3] the tower rule, [4] and the smoothing theorem, [5] among other names, states that if is a random variable whose expected value is defined, and is any random variable on the same ...
Other articles where theory of rational expectations is discussed: business cycle: Rational expectations theories: In the early 1970s the American economist Robert Lucas developed what came to be known as the “Lucas critique” of both monetarist and Keynesian theories of the business cycle. Building on rational expectations concepts introduced by the American economist John Muth, Lucas…
t. e. Rational emotive behavior therapy ( REBT ), previously called rational therapy and rational emotive therapy, is an active-directive, philosophically and empirically based psychotherapy, the aim of which is to resolve emotional and behavioral problems and disturbances and to help people to lead happier and more fulfilling lives.
Gerd Gigerenzer has criticized the framing of cognitive biases as errors in judgment, and favors interpreting them as arising from rational deviations from logical thought. Explanations include information-processing rules (i.e., mental shortcuts), called heuristics, that the brain uses to produce decisions or judgments.
This called for greater consistency with microeconomic theory based on rational choice theory, and in particular emphasized the idea of rational expectations. Lucas and others argued that Keynesian economics required remarkably foolish and short-sighted behaviour from people, which totally contradicted the economic understanding of their ...
