Indirect Rational Expectations and Estimation in a Single Equation Macro Model

Asraul Hoque

No 266883, Department of Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: This paper makes an attempt to introduce rational expectations ideas in a single equation through a random coefficient technique. In fact, the ideas behind adaptive expectations and rational expectations have been combined here and viewed as complementary rather than . substitute to each other. We also make an attempt to provide an answer to Lucas's valid criticism of econometric policy evaluation in the presence of rational expectations.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Pages: 19
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Persistent link: https://EconPapers.repec.org/RePEc:ags:monebs:266883

DOI: 10.22004/ag.econ.266883

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