Question: What is the difference between adaptive expectations and rational expectations
What is the difference between adaptive expectations and rational expectations?
Answer to relevant QuestionsHow can adaptive expectations of inflation result in clockwise Phillips loops? Why would these loops not be completely regular?Why do developed countries experience a degree of convergence over time? Would you expect there to be total convergence of GDP per head?Define demand-side and supply-side policies. Sometimes it is said that Keynesians advocate demand-side policies and monetarists advocate supply-side policies. Is there any accuracy in this statement?If capital moves from developed to less developed countries, and labor moves from less developed to developed countries, what effects will these factor movements have on wage rates and the return on capital in the two types ...For what reasons might the exchange rate diverge from the purchasing-power parity rate over the longer term?
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