Rational Expectations in the Macro Model

William Poole

WP

William Poole

Discussants: Martin Neil Baily and

Martin Neil Baily Senior Fellow Emeritus - Economic Studies, Center on Regulation and Markets

Edmund S. Phelps

ESP

Edmund S. Phelps Columbia University

THE ANTICIPATIONS of households and firms played a central role in Keynes’ General Theory, and in the thinking of every macrotheorist since. My purpose in this paper is to examine the major new issues about anticipations raised by the recent explosion of theoretical and empirical work based on the theory of rational expectations