RATIONAL EXPECTATIONS AND MONETARY THEORY: AN INVESTIGATIVE PAPER[1960 - 1989]

Abstract

SINCE 1930, EXPECTATIONS HAVE PLAYED AN IMPORTANT ROLE IN ECONOMIC THEORY AND THIS IS BECAUSE ECONOMICS IS GENERALLY CONCERNED WITH THE IMPLICATIONS OF CURRENT ACTIONS FOR THE FUTURE. THIS PAPER THEREFORE ARGUES THAT THE DEVELOPMENT OF RATIONAL EXPECTATIONS THEORY WILL MAKE A MORE SIGNIFICANT CONTRIBUTION TO ECONOMICS(AND IN PARTICULAR, MONETARY ECONOMICS) IN THE IMPETUS IT GIVES TO RESEARCH ON THE VITAL AREAS OF LEARNING AND PRICE EXPECTATIONS FORMATIONRATIONAL EXPECTATIONS, MONETARY THEORY, AUGUMENTED PHILLIPS CURVE, INFLATION, OUTPUT, PRICES