The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Robert J. Shiller
Reference work entry


The modelling of economic expectations is central to economics. Expectations of future economic conditions can be represented in econometric models by survey data, expectations proxies such as adaptive expectations, expert forecasts, or market expectations. The theory that expectations are rational, that is, optimal forecasts given the model, can be a useful modelling device, but evidence from behavioural economics shows that it has important limitations.


Adaptive expectations Aspirations Behavioural economics Capital asset pricing model Certainty equivalent Distributed lag Error-learning hypothesis Euler equations Expectations Expectations proxies Expected utility Extrapolative expectations Forecasting Iowa Electronic Market Law of iterated projections Market expectations Mathematical expectations Muth, John F. Phillips curve Phillips, A. W. Prediction markets Quadratic expected utility function Rational expectations Rational expectations equilibrium Regressive expectations Stochastic optimal control Subjective probability Survey expectations Transformations of variables Unexpected inflation Variance 

JEL Classifications

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Robert J. Shiller
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