Conceptualizing the formation and role of expectations before 1950: George Katona's thought

This article analyzes Katona's theory of expectations and compares it to that of Keynes and Hicks. It discusses the implicit and explicit debates on the introduction of psychology in economic theory. The aim of this paper is twofold: define Katona's thought and examine the impact of this work on the debate on expectations in macroeconomics. This paper shows that Katona is the only author, to our knowledge, who develops both an empirical and theoretical research program on expectations that borrows from the epistemology of Keynes. While rediscovering Katona's work, this paper contributes to highlight the forgotten methodology that initiated the construction of confidence (or sentiment) indexes. It also discusses the implicit and explicit debates on the introduction of psychology in economic theory