TY - BOOK ID - 117510985 TI - Rethinking expectations AU - Frydman, Roman AU - Phelps, Edmund S PY - 2013 SN - 9781400846450 1400846455 1283868369 9780691155234 0691155232 9781283868365 PB - Princeton Princeton University Press DB - UniCat KW - Macroeconomics KW - Rational expectations (Economic theory) KW - Economics KW - Expectations, Rational (Economic theory) KW - Economic forecasting KW - Time and economic reactions KW - Uncertainty KW - Macroeconomics. KW - Phelps microfoundations volume. KW - Rational Expectations Hypothesis. KW - Real Business Cycles. KW - Ricardian Equivalence. KW - asset prices. KW - bounded rationality. KW - economic theory. KW - employment. KW - expectation formation. KW - expectational coordination. KW - expectations. KW - finance. KW - financial crisis. KW - financial instruments. KW - inflation. KW - informational efficiency. KW - learning. KW - macroeconometric models. KW - macroeconomic analysis. KW - macroeconomic models. KW - macroeconomics. KW - microfoundations. KW - nonroutine change. KW - rational expectations. KW - rationality. KW - real-time learning. KW - unemployment. UR - https://www.unicat.be/uniCat?func=search&query=sysid:117510985 AB - This book originated from a 2010 conference marking the fortieth anniversary of the publication of the landmark "Phelps volume," Microeconomic Foundations of Employment and Inflation Theory, a book that is often credited with pioneering the currently dominant approach to macroeconomic analysis. However, in their provocative introductory essay, Roman Frydman and Edmund Phelps argue that the vast majority of macroeconomic and finance models developed over the last four decades derailed, rather than built on, the Phelps volume's "microfoundations" approach. Whereas the contributors to the 1970 volume recognized the fundamental importance of according market participants' expectations an autonomous role, contemporary models rely on the rational expectations hypothesis (REH), which rules out such a role by design. The financial crisis that began in 2007, preceded by a spectacular boom and bust in asset prices that REH models implied could never happen, has spurred a quest for fresh approaches to macroeconomic analysis. While the alternatives to REH presented in Rethinking Expectations differ from the approach taken in the original Phelps volume, they are notable for returning to its major theme: understanding aggregate outcomes requires according expectations an autonomous role. In the introductory essay, Frydman and Phelps interpret the various efforts to reconstruct the field--some of which promise to chart its direction for decades to come. The contributors include Philippe Aghion, Sheila Dow, George W. Evans, Roger E. A. Farmer, Roman Frydman, Michael D. Goldberg, Roger Guesnerie, Seppo Honkapohja, Katarina Juselius, Enisse Kharroubi, Blake LeBaron, Edmund S. Phelps, John B. Taylor, Michael Woodford, and Gylfi Zoega. ER -