Showing 1 - 10 of 13
Starting with J. Muth’s unsupported and unsupportable claims, originally made in 1961, that “rational expectations” were subjective probability distributions that were distributed around a known, true, objective probability distribution, various economists have provided the same type of...
Persistent link: https://www.econbiz.de/10014109858
Rational Expectations is an approach to probability and expectations that was initiated by Muth in 1961. Muth's concept is based on an immense muddle and confusion in his mind about subjective and objective concepts of probability that confuses subjective probability with objective probability....
Persistent link: https://www.econbiz.de/10012908227
J. Muth's 1961 article on rational expectations was written without any knowledge on Muth's part about what a subjective theory of probability entails and is based on, or what an objective theory of probability entails and is based on. Muth's disbelief, that the individual, subjective...
Persistent link: https://www.econbiz.de/10012909620
The theory of rational expectations has no foundation in any extant theory of probability. None of the five existing theories of probability (Logical, Subjective, Classical, Propensity, and Limiting (relative) Frequency) lend any support at all to the Muthian conjecture that the subjective...
Persistent link: https://www.econbiz.de/10012910371
All Rational Expectation Theorists rely on the Fallacy of Conditional Apriorism (Long Runism)in order to operationalize the Objective Limiting Frequency Interpretation of Probability. However, such a limit only occurs in the far distant long run as the number of observations from Time Series...
Persistent link: https://www.econbiz.de/10012893664
Keynes's logical, objective, relation of probability, P(a/h)=α,where α is a degree of rational belief, has nothing to do with truth or falsehood. Probability is not truth. The belief that a probability, expectation or expected values can be true (false) appears to involve the same kind of...
Persistent link: https://www.econbiz.de/10012863326