IDEAS home Printed from
   My bibliography  Save this article

The disappointment of expectations and the theory of fluctuations


  • Ferdinando Meacci

    () (Università degli Studi di Padova - Dipartimento di Scienze Economiche e Aziendali «M. Fanno»)


The role of expectations in macroeconomic theory was launched in the 1930s and has been re-launched in the second half of the 20th century. The focus of the first phase was on the impact on macroeconomic fluctuations of «errors in time» (Fanno 1933) or, which comes to the same, of the «disappointment of expectations» (Hicks 1933). This was in line with the replacement of the paradigm of General Equilibrium Theory – which took place in those years and whose framework is logical time – by the new paradigm of Uncertainty and Expectations – whose framework is historical time and whose initial centre of gravitation was the fluctuations of effective demand (Keynes 1936). The scope of this paper is to evaluate the role assigned to errors in time or disappointment of expectations in the theory of macroeconomic fluctuations. The paper is divided in two parts. The first is concerned with the achievements of the ‘years of high theory’, the second with the achievements of the ‘years of rational expectations’. The first part provides a benchmark for evaluating the achievements discussed in the second part. The paper shows that the focus on errors in time has been replaced in recent times by a set of assumptions and arguments which either neglect the impact on fluctuations of the disappointment of expectations or even exclude the very possibility of this disappointment. The paper concludes by comparing the achievements of macroeconomic theory in the two phases of its development and by ranking their different relevance for the modern theory of fluctuations.

Suggested Citation

  • Ferdinando Meacci, 2012. "The disappointment of expectations and the theory of fluctuations," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 20(2), pages 157-184.
  • Handle: RePEc:hid:journl:v:20:y:2012:2:7:p:157-184

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Sargent, Thomas J. & Wallace, Neil, 1976. "Rational expectations and the theory of economic policy," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 169-183, April.
    2. Katia Caldari & Ferdinando Meacci, 2007. "Errors in Time as Causes of Economic Fluctuations : An Introduction," Il Pensiero Economico Italiano, Fabrizio Serra Editore, Pisa - Roma, vol. 15(1), pages 127-146.
    3. Tony Lawson, 2009. "The current economic crisis: its nature and the course of academic economics," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 759-777, July.
    4. Roger E. A. Farmer, 1999. "Macroeconomics of Self-fulfilling Prophecies, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262062038, August.
    5. Kregel, J A, 1976. "Economic Methodology in the Face of Uncertainty: The Modelling Methods of Keynes and the Post-Keynesians," Economic Journal, Royal Economic Society, vol. 86(342), pages 209-225, June.
    6. Ferdinando Meacci, 2009. "Uncertainty And Expectations In Shackle'S Theory Of Capital And Interest," Metroeconomica, Wiley Blackwell, vol. 60(2), pages 302-323, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hid:journl:v:20:y:2012:2:7:p:157-184. 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: (Mario Aldo Cedrini). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.