On Mon, 11 Nov 2002 [EMAIL PROTECTED] wrote: > Yes. Somewhere along the line someone--either the most ardents adherents or > the most disingenuous opponents--has defined "rational expectations" as > meaning that people are perfect prognosticators, omnicient not only about > past conditions, but about future conditons as well. Under the definition > nobody has "rational expectations."
Ummm...not quite. Rational expectations just means that a person's expectations are unbiased. There can be high variance, but the variance is around a true mean. Check Sargent's short piece on rational expectations for a primer: http://www.econlib.org/library/Enc/RationalExpectations.html Eric Crampton
