Definition of rational expectations hypothesis in English:

Share this entry

rational expectations hypothesis

noun

Economics
The hypothesis that an economic agent will make full use of all available information when forming expectations, especially with regard to inflation, and not just past values of a particular variable. Compare with adaptive expectations hypothesis.
Example sentences
  • Pity about the rational expectations hypothesis, eh.
  • Rational expectations theory has emerged as an important aspect of new classical economics.
  • In the context of the bond market, empirical tests of the rational expectations hypothesis (REH) have without exception been tests of the time-series properties of interest rates.

For editors and proofreaders

Syllabification: ra·tion·al ex·pec·ta·tions hy·poth·e·sis

Share this entry
 

What do you find interesting about this word or phrase?

Comments that don't adhere to our Community Guidelines may be moderated or removed.