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Legacies of rational expectations, Lucas’s contributions, and philosophy of time and existence

Author

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  • Hiroaki HAYAKAWA

    (Faculty of Economics, Saitama University, Japan)

Abstract

This study aims to clarify the legacies of rational expectations and Lucas’s contributions to macroeconomics. The study also aims to explore the philosophical implications of rational expectations, especially in relation to the philosophy of time and existence. The study finds that rational expectations have had a significant impact on macroeconomic theory and policy. Lucas’s contributions, particularly his critique of Keynesian economics and his development of the Lucas critique, have been instrumental in shaping modern macroeconomics. The study also finds that rational expectations have philosophical implications, particularly in relation to the concept of time and the nature of existence. The study concludes that rational expectations and Lucas’s contributions have had a profound impact on both economics and philosophy.

Suggested Citation

  • Hiroaki HAYAKAWA, 2018. "Legacies of rational expectations, Lucas’s contributions, and philosophy of time and existence," Journal of Economic and Social Thought, EconSciences Journals, vol. 5(2), pages 117-159, June.
    • Handle: RePEc:cvv:journ3:v:5:y:2018:i:2:p:117-159
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    References listed on IDEAS

    as
    1. Lucas, Robert E, Jr & Prescott, Edward C, 1971. "Investment Under Uncertainty," Econometrica, Econometric Society, vol. 39(5), pages 659-681, September.
    2. Lucas, Robert Jr., 1982. "Interest rates and currency prices in a two-country world," Journal of Monetary Economics, Elsevier, vol. 10(3), pages 335-359.
    3. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    4. Kareken, John H & Muench, Thomas & Wallace, Neil, 1973. "Optimal Open Market Strategy: The Use of Information Variables," American Economic Review, American Economic Association, vol. 63(1), pages 156-172, March.
    5. Sargent, Thomas J., 1996. "Expectations and the nonneutrality of Lucas," Journal of Monetary Economics, Elsevier, vol. 37(3), pages 535-548, June.
    6. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
    7. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    8. Lucas, Robert Jr. & Stokey, Nancy L., 1983. "Optimal fiscal and monetary policy in an economy without capital," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 55-93.
    9. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, December.
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    Keywords

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    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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