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The Evolving Rationality of Rational Expectations: An Assessment of Thomas Sargent's Achievements

The Evolving Rationality of Rational Expectations: An Assessment of Thomas Sargent's Achievements Book Reviews dependent stories, and Sargent plays a role and can be thought of or reconstructed as contributing to work in each of these narrative lines: the stories involve the expiration of the Phillips curve, policy irrelevance, using available techniques, restoring symmetry (between agent and economist), optimizing over information, endogenizing expectations, making public predictions, countering bounded rationality, and incorporating vector autoregressions. In Chapter 1, Sent presents all those various stories, which were involved in what we know now to call the rational expectations revolution in macroeconomics. Those ten stories are each involved, in some measure or another, in past reconstructions of the revolution. What Sent is doing though is suggesting that all these overlapping narratives must be invoked in various measures to tell a convincing story, all are involved in some mix-and-match way. But which story is the right one? Sent answers all, or none, or many, for it is the nature of the story that the real history is not a given but is constructed out of all the elements described. Chapter 2 sees Sent providing a background to what is to follow, a discussion abut the probabilistic revolution, and how economists learned to endogenize randomness in http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png History of Political Economy Duke University Press

The Evolving Rationality of Rational Expectations: An Assessment of Thomas Sargent's Achievements

History of Political Economy , Volume 32 (1) – Mar 1, 2000

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Publisher
Duke University Press
Copyright
Copyright 2000 by Duke University Press
ISSN
0018-2702
eISSN
1527-1919
DOI
10.1215/00182702-32-1-178
Publisher site
See Article on Publisher Site

Abstract

Book Reviews dependent stories, and Sargent plays a role and can be thought of or reconstructed as contributing to work in each of these narrative lines: the stories involve the expiration of the Phillips curve, policy irrelevance, using available techniques, restoring symmetry (between agent and economist), optimizing over information, endogenizing expectations, making public predictions, countering bounded rationality, and incorporating vector autoregressions. In Chapter 1, Sent presents all those various stories, which were involved in what we know now to call the rational expectations revolution in macroeconomics. Those ten stories are each involved, in some measure or another, in past reconstructions of the revolution. What Sent is doing though is suggesting that all these overlapping narratives must be invoked in various measures to tell a convincing story, all are involved in some mix-and-match way. But which story is the right one? Sent answers all, or none, or many, for it is the nature of the story that the real history is not a given but is constructed out of all the elements described. Chapter 2 sees Sent providing a background to what is to follow, a discussion abut the probabilistic revolution, and how economists learned to endogenize randomness in

Journal

History of Political EconomyDuke University Press

Published: Mar 1, 2000

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