In the 1980s and at beginning of the 1990s the debate on expectation formation mechanism was dominated by the rational expectation hypothesis. Later on, more interest was directed towards alternative approaches to expectations analysis, mainly based on the bounded rationality paradigm introduced earlier by Herbert A. Simon. The bounded rationality approach is used here to describe the way expec...

This paper compares four equilibrium business cycle models with increasing returns to scale production technologies that allow for aggregate fluctuations due to self-fulfilling expectations. Necessary and sufficient conditions for the existence of stationary sunspot equilibria are derived. Numerical examples demonstrate that the degree of increasing returns necessary for the existence of statio...

According to the convergence hypothesis, different economies are bound to converge to one supposedly superior system under the uniformating pressure of globalisation. Consequently, also organisational structures converge. Contrary to what the convergence hypothesis maintains, globalisation does not originate nor requires the convergence to a unique, best economic system and organisational struc...

Whether economic globalisation is associated with a narrowing or a widening of the social class gap between the education and occupation expectations of Sri Lankan youth is examined through a test of four hypotheses. Methodologically, the study employs the estimated parameters from a system of seemingly unrelated equations for testing hypotheses. Youth expectations for education and occupation ...

In this study, we propose an exchange market model with artificial adaptive agents (AGEDASI TOF) and conduct a computer simulation as a study on the artificial market. First, AGEDASI TOF is compared with a random walk model and a linear regression model in out-of-sample forecasts. The results indicate that AGEDASI TOF outperforms the other models over all forecast horizons. Next, we analyze an ...

At a Rational Expectations Equilibrium (REE), individuals are assumed to know the map from states to prices. This hypothesis has two components, that agents agree (consensus) and that they have point expectations (degeneracy). We consider economies where agents' beliefs are described by a joint distribution on states and prices, and these beliefs are fulfilled at equilibrium. Beliefs are self-f...

This paper introduces a tractable, structural model of subjective beliefs. Forward-looking agents care about expected future utility flows, and hence have higher current felicity if they believe that better outcomes are more likely. On the other hand, expectations that are biased towards optimism worsen decision making, leading to poorer realized outcomes on average. Optimal expectations balanc...

OBJECTIVE Education is a crucial social determinant of health. Food insecurity can be detrimental to children's academic achievement, potentially perpetuating a cycle of poverty and food insecurity. We aimed to assess the relationship between food insecurity and academic achievement in Canadian school-aged children. DESIGN Cross-sectional study of children and parents. Parents completed the s...

This study examines the potential applications of the rational expectations hypothesis (REH) and adaptive learning theory in information technology (IT) investment and adoption decision-making. Although REH has been widely used in other areas of microeconomics and macroeconomics, we have not yet seen common use of the related theory in the Information Systems (IS) field. Despite the fact that r...

During the past decade the theoretical framework underlying macroeconomic stabilization analysis has undergone a number of significant developments. Theories designed to explain the crucial linkage between aggregate demand policy and real economic variables have been revised following the research on the “new microfoundations” of employment and inflation. Critical expectations effects of stabil...