Beyond Rational Expectations: A Constructive Interpretation of Keynes's Analysis of Behaviour under Uncertainty
This paper suggests that behavior under uncertainty depends not only on rational expectations but also the agent's evaluation of the adequacy of the available evidence on which the expectations are based. It is argued that behavioral functions need to be augmented by a credence variable. This proposition is derived from Keynes's argument in the 'General Theory' that investment depends on both the most probable forecast and the state of confidence, reflecting the distinction between probability and weight in his 'A Treatise on Probability.' The research implications of the proposed model are indicated. Copyright 1994 by Royal Economic Society.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 104 (1994)
Issue (Month): 423 (March)
|Contact details of provider:|| Postal: |
Phone: +44 1334 462479
Web page: http://www.res.org.uk/
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishers.co.uk/asp/journal.asp?ref=0013-0133|
When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:104:y:1994:i:423:p:327-37. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.