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Expectational coordination failures and Market outcomes' volatility

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  • Roger Guesnerie

    (CDF - Collège de France - CdF - Collège de France, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics)

Abstract

The first part of this text reviews the standard economic viewpoint on expectational coordination, a viewpoint that the recent events have challenged. The second part reviews different existing directions assessments of the rational expectations hypothesis that have been made to-date. The third part shows how such a critical assessment, along the lines of the so-called "eductive" learning approach, radically modifies our view of three key problems : the economic role of speculation, the informational efficiency of markets and, last but not least, the ability of agents with long horizon to anticipate the future. The fourth part stresses what has been achieved so far well as the future challenges of the approaches advocated in this paper.

Suggested Citation

  • Roger Guesnerie, 2011. "Expectational coordination failures and Market outcomes' volatility," PSE Working Papers halshs-00601065, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00601065
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00601065
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    Keywords

    expectational coordination; rational expectations hypothesis;

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