Rational Beliefs Theory: A Review

Maurizio Motolese () and Carsten Nielsen

Rivista Internazionale di Scienze Sociali, 2007, vol. 115, issue 3, 293-326

Abstract: The Rational Beliefs Theory is founded on the observation that in most situations the same data may be rationally explained (in terms of a statistical model) in many different ways. This is obvious in a world where there is a limited number of observations. The novel idea of the Rational Beliefs Theory is to use a technical device (namely the concept of a non-stationary but stable measure) to formulate rational differences of opinion also in a world with «unlimited» data on the past performance of the economy. In this article we provide a non-technical introduction to the Theory of Rational Beliefs as well as a brief overview of the papers that have been written using this theory.

Keywords: Expectations; Heterogeneous Beliefs; Rational Beliefs; Rational Belief Equilibrium; Endogenous Uncertainty (search for similar items in EconPapers)
JEL-codes: B0 D83 D84 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:vep:journl:y:2007:v:115:i:3:p:293-326

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