# Questions tagged [rational-expectations]

The Rational Expectations Hypothesis postulates that the value a variable is expected to take by an economic agent equals the mathematical expected value of that variable conditional on all information available at the time of expectations formation.

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### Hybrid New Keynesian philips curve model - inflation expectation

I am doing research on the HNKPC model following Gali and Gertler 1999 as per the picture. I do not understand how to get the inflation expectations. Could I get more insight on how to perform this ...
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### Guess method for solving rational expectations model?

How does one proceed to solve a rational expectations model by guessing. Could someone illustrate a very simple case, or guide me to a resource on this? I am guessing this is somewhat similar to the ...
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### Analyzing a Gambling Race Paradox

Suppose a number of players are given $100$ points each, and repeatedly engage in a gamble having positive expected value, with the goals of being the first player to reach $100000$ points. Solving ...
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When I was in university, I remember studying some kind of topic in adv microeconomics where someone gives you three options, where one is obviously worse and is put there just to deceive you so that ...
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### Are rational expectations in economics purely forwards looking, or can they have backward looking components?

Are rational expectations (Muth, Lucas, Kyland and Prescott) in economics purely forwards looking, or can they have backward looking components?
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### Definiton of information sets in rational expecations models

I am struggling with the notion of 'information sets' in the context of rational expectation models in economics. I found interesting notes on the web (http://www2.econ.iastate.edu/tesfatsi/reintro....
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### Fair value that a risk averse individual would pay to enter a gamble

Introduction Assuming an individual (or corporation) with risk aversion and a von Neumann-Morgenstern utility curve and given a gamble g with E(g) > 0. From what I researched, certainty equivalent is ...
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