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asprague24 asprague24
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4 years ago
Explain the rational expectations theory of inflation.
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Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
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4 years ago
The rational expectations theory of inflation analyzes how the public uses all the information available to them to be able to accurately predict future inflation. According to this theory, on average, the public anticipates the future correctly, so their expectations are rational.
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