Irrational Expectations

Lynn Stout and Cornell Library

No aq63c, LawRxiv from Center for Open Science

Abstract: 3 Legal Theory 227 (1997) Rational expectations models have become a staple of economic theory and the basis for a Nobel Prize. This article argues that rational expectations analysis suffers from potentially fatal flaws that seriously undermine its value in understanding many market phenomena. Using the example of financial markets, the article illustrates how the rational expectations approach has worked to obscure, rather than to illuminate, our understanding of speculation and speculative markets. This misguidance raises problems for law and policy.

Date: 2018-06-25
New Economics Papers: this item is included in nep-hpe, nep-pke and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:osf:lawarx:aq63c

DOI: 10.31219/osf.io/aq63c

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