the hypothesis that decision-makers base their decisions on predictions which contain no systematic errors.
In forming opinion about future events, the use of all available information to assess the probabilities of the possible states of the world. More simply, expectations that are as correct as is possible with available information.
Expectations about the future rate of inflation or other economic events that people form using all available information, including predictions about the effect of present and future policy actions by the government.
are expectations formed on the basis of all available relevant information concerning the variable being predicted. Moreover, economic agents are assumed to use available information intelligently; that is, they understand the relationships between the variables they observe and the variables they are trying to predict.
A school of thought that claims people form expectations based on all available information, including the probable future actions of government policy makers.
The process of forming expectations about the future by gathering all readily available information.
the expectations of individuals that are formed by using all available information
the belief that people's expectations compensate for, and render useless, interventionist government policy.
Rational expectations is a theory in economics originally proposed by John F. Muth (1961) and later developed by Robert E. Lucas Jr.