rational expectations revolution
E271829
The rational expectations revolution was a major shift in macroeconomics that emphasized forward-looking behavior and microfoundations, fundamentally changing how economists model policy effects and anticipate agents’ responses.
All labels observed (2)
| Label | Occurrences |
|---|---|
| learning and expectations in macroeconomics | 1 |
| rational expectations revolution canonical | 1 |
How this entity was disambiguated
This entity first appeared as the object of triple T2504720 — resolving that mention is where its identity was fixed. The disambiguator weighed these candidate entities and picked the highlighted one (or “None”, minting a new entity). This is how homonymy is resolved: the same surface form can point to different entities.
NED1
Entity disambiguation (via context triple)
gpt-5-mini-2025-08-07
Target entity: rational expectations revolution Context triple: [Lucas critique, relatedTo, rational expectations revolution]
-
A.
New Neoclassical Synthesis
The New Neoclassical Synthesis is a macroeconomic framework that blends key elements of New Keynesian and New Classical theories, using microfounded models with rational expectations and nominal rigidities to analyze monetary and fiscal policy.
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B.
On the Theory of Economic Policy
On the Theory of Economic Policy is a foundational work in economics by Jan Tinbergen that systematically analyzes how governments can design and coordinate economic policies using formal models and quantitative methods.
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C.
Lucas critique
The Lucas critique is an influential argument in macroeconomics asserting that policy evaluations based on historical correlations are unreliable because people’s expectations and behavior change systematically when policy rules change.
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D.
Rules, Discretion, and Reputation in a Model of Monetary Policy
"Rules, Discretion, and Reputation in a Model of Monetary Policy" is an influential economic paper that analyzes how different monetary policy regimes and the credibility of policymakers affect inflation and output outcomes.
-
E.
the "Volcker shock" in U.S. monetary policy
The "Volcker shock" in U.S. monetary policy refers to the dramatic interest rate hikes and tight monetary stance of the early 1980s aimed at breaking entrenched inflation, which triggered a deep recession but ultimately restored price stability and reshaped central banking practice.
- F. None of above. chosen
- G. Unsure - the case is ambiguous/there is not enough information to decide.
NED2
Entity disambiguation (via description)
gpt-5-mini-2025-08-07
Target entity: rational expectations revolution Target entity description: The rational expectations revolution was a major shift in macroeconomics that emphasized forward-looking behavior and microfoundations, fundamentally changing how economists model policy effects and anticipate agents’ responses.
-
A.
New Neoclassical Synthesis
The New Neoclassical Synthesis is a macroeconomic framework that blends key elements of New Keynesian and New Classical theories, using microfounded models with rational expectations and nominal rigidities to analyze monetary and fiscal policy.
-
B.
On the Theory of Economic Policy
On the Theory of Economic Policy is a foundational work in economics by Jan Tinbergen that systematically analyzes how governments can design and coordinate economic policies using formal models and quantitative methods.
-
C.
Lucas critique
The Lucas critique is an influential argument in macroeconomics asserting that policy evaluations based on historical correlations are unreliable because people’s expectations and behavior change systematically when policy rules change.
-
D.
Rules, Discretion, and Reputation in a Model of Monetary Policy
"Rules, Discretion, and Reputation in a Model of Monetary Policy" is an influential economic paper that analyzes how different monetary policy regimes and the credibility of policymakers affect inflation and output outcomes.
-
E.
the "Volcker shock" in U.S. monetary policy
The "Volcker shock" in U.S. monetary policy refers to the dramatic interest rate hikes and tight monetary stance of the early 1980s aimed at breaking entrenched inflation, which triggered a deep recession but ultimately restored price stability and reshaped central banking practice.
- F. None of above. chosen
Statements (48)
| Predicate | Object |
|---|---|
| instanceOf |
macroeconomic paradigm shift
ⓘ
research program in macroeconomics ⓘ |
| affects |
analysis of fiscal policy
ⓘ
analysis of monetary policy ⓘ understanding of business cycles ⓘ understanding of inflation dynamics ⓘ |
| associatedWith |
Edward C. Prescott
ⓘ
Neil Wallace ⓘ Robert Lucas Jr. ⓘ
surface form:
Robert E. Lucas Jr.
Robert J. Barro ⓘ Thomas J. Sargent ⓘ |
| challenges |
adaptive expectations hypothesis
ⓘ
policy evaluation using reduced-form correlations ⓘ traditional Keynesian macroeconometric models ⓘ |
| consequence |
greater emphasis on internal consistency of macro models
ⓘ
reduced reliance on ad hoc behavioral equations ⓘ |
| contrastsWith | old Keynesian macroeconometric tradition ⓘ |
| emergedIn | 1970s ⓘ |
| emphasizes |
forward-looking behavior of economic agents
ⓘ
intertemporal optimization ⓘ microfoundations of macroeconomics ⓘ model-consistent expectations ⓘ |
| field |
macroeconomics
ⓘ
monetary economics ⓘ |
| hasCoreConcept | rational expectations ⓘ |
| historicalContext |
gained prominence after stagflation in the 1970s
ⓘ
occurred after breakdown of simple Phillips curve trade-off ⓘ |
| influenced |
New Keynesian economics
ⓘ
dynamic stochastic general equilibrium models ⓘ macroeconomic policy design ⓘ modern monetary policy analysis ⓘ new classical macroeconomics ⓘ real business cycle theory ⓘ |
| influencedBy |
John F. Muth
ⓘ
Milton Friedman ⓘ classical macroeconomics ⓘ |
| keyIdea |
agents use all available information efficiently
ⓘ
expectations are consistent with the model’s predictions ⓘ policy evaluation must account for expectation formation ⓘ systematic policy changes alter expectations and behavior ⓘ |
| leadsTo |
focus on rules rather than discretionary policy
ⓘ
policy ineffectiveness propositions in some models ⓘ |
| motivated |
development of DSGE models for policy analysis
ⓘ
microfoundations for aggregate relationships like the Phillips curve ⓘ |
| supports |
Lucas critique
ⓘ
surface form:
Lucas critique of traditional policy evaluation
|
| uses |
general equilibrium modeling
ⓘ
intertemporal optimization by households and firms ⓘ rational expectations hypothesis ⓘ |
How these facts were elicited
The pipeline generated the facts above by prompting gpt-5.1 with this entity's name + description and the instruction below.
Instruction
You are a knowledge base construction expert. Given a subject entity and a description of it, return factual statements that you know for the subject as a JSON list of dictionaries(triples), where keys must be "subject", "predicate" and "object". The number of facts may be very high, between 25 to 50 or more, for very popular subjects. For less popular subjects, the number of facts can be very low, like 5 or 10. # Requirements - If you don't know the subject at all, return an empty list. - If the subject is not a named entity, return an empty list. - Include at least one triple where predicate is "instanceOf". - Do not get too wordy. - Separate several objects into multiple triples with one object.
Input
Subject: rational expectations revolution Description of subject: The rational expectations revolution was a major shift in macroeconomics that emphasized forward-looking behavior and microfoundations, fundamentally changing how economists model policy effects and anticipate agents’ responses.
Referenced by (2)
Full triples — surface form annotated when it differs from this entity's canonical label.
this entity surface form:
learning and expectations in macroeconomics