BPEA | 1973 No. 3

Rational Expectations: A Correction

1973, No. 3

I HAVE DISCOVERED an error in the computations of regression (3) and the regressionsin Table 1 in my paper in Brookings Papers on Economic Activity (2:1973), on pages 452-53 and 460. With the exception of the lagged unemployment rates in those regressions, the instrumental variables in Ot were all inadvertently lagged four more quarters than is reported in the paper. For example, mti_ in equation (3) is actually mt_5. The correct calculations are reported here in regression (3) and Table 1.