Rational Beliefs Theory: A Review
The Rational Beliefs Theory is founded on the observation that in most situations the same data may be rationally explained (in terms of a statistical model) in many different ways. This is obvious in a world where there is a limited number of observations. The novel idea of the Rational Beliefs Theory is to use a technical device (namely the concept of a non-stationary but stable measure) to formulate rational differences of opinion also in a world with «unlimited» data on the past performance of the economy. In this article we provide a non-technical introduction to the Theory of Rational Beliefs as well as a brief overview of the papers that have been written using this theory.
Volume (Year): 115 (2007)
Issue (Month): 3 ()
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