Expectations of the future play a large role in macroeconomics. The rational expectations assumption, which is commonly used in the literature, provides an important benchmark, but may be too strong for some applications. This paper reviews some recent research that has emphasized methods for...

In this paper, James Bullard reviews the recent evidence on the long-run neutrality and superneutrality of money. Bullard restricts his attention primarily to several papers assessing the time-series evidence using techniques due to Fisher and Seater (1993) and King and Watson (1997).

A speech before the Association for University Business and Economic Research Annual Meeting, University of Memphis, Memphis, Tenn., Oct. 16, 2006

This paper details the microfoundations of the model presented in Staff Report no. 234, "Great Expectations and the End of the Depression." It defines the Markov perfect equilibrium formally in the nonlinear model, discusses in some detail the approximation method used and the order of accuracy...

The monetary control literature has attempted to explore the effects of alternative policies without succeeding in incorporating rational expectations or in integrating analysis of the money supply sector into a complete macroeconomic framework. the rational expectations approach, while...

An investigation of the ways in which rational expectations theory fundamentally changes monetary policy analysis and an attempt to generalize the implications of such analysis.

This paper considers the evidence of “near-rationality,” as described by Akerlof, Dickens, and Perry (2000). Using detailed surveys of household inflation expectations for the United States and Sweden, we find that the data are generally unsupportive of the near-rationality hypothesis....

This paper discusses at an undergraduate level how forecast rationality can be tested. It explains that forecasters should correctly use any relevant information they knew in making their predictions. It shows that forecast rationality can be tested by determining whether the forecasters'...