skip to content

Faculty of Economics

Journal Cover

Hayes, M.G.

The state of short-term expectation.

Review of Political Economy

Vol. 25(2) pp. 205-224 (2013)

Abstract: The claim that Keynes makes a tacit assumption in Chapter 3 of The General Theory, that short-term expectations are fulfilled, is unwarranted and unnecessary. Kregel's seminal 1976 paper and its subsequent development by Chick and others have contributed to the general acceptance of this claim; these contributions are critically evaluated in the present paper. This critique clears the ground for a recognition that Keynes instead adopted the assumption of judicious foresight, which would now be called short-term rational expectations. That recognition in turn should encourage a reappraisal of Keynes's thought, by mainstream economists and others.

Author links:

Publisher's Link:

Papers and Publications

Recent Publications

Elliott, M., Golub, B. and Leduc, M. V. Supply Network Formation and Fragility American Economic Review [2022]

Ambrus, A. and Elliott, M. Investments in Social Ties, Risk Sharing, and Inequality Review of Economic Studies [2021]

Freund, L. B., Lee, H. and Rendahl, P. The Risk-Premium Channel of Uncertainty: Implications for Unemployment and Inflation Review of Economic Dynamics, forthcoming [2023]

Chen, J., Elliott, M. and Koh, A. Capability Accumulation and Conglomeratization in the Information Age Journal of Economic Theory, accepted [2023]