This paper provides an alternative to the theory of rational expectations (RE). Its central idea is that the information set on which agents will choose to condition their expectations will not, in general, include all the available information. Our alternative has many of the attractive features of RE; it emerges from an explicit choice-theoretic framework; it has wide applicability; and it can in principle explain the failure of models incorporating RE to account for the dynamics of many macroeconomic relationships.
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cutler, David M & Poterba, James M & Summers, Lawrence H, 1991.
"Speculative Dynamics,"
Review of Economic Studies,
Blackwell Publishing, vol. 58(3), pages 529-46, May.
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David M. Cutler & James M. Poterba & Lawrence H. Summers, 1990.
"Speculative Dynamics,"
NBER Working Papers
3242, National Bureau of Economic Research, Inc.
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Culter, D.M. & Poterba, J.M. & Summers, L.H., 1990.
"Speculative Dynamics,"
Working papers
544, Massachusetts Institute of Technology (MIT), Department of Economics.
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