The Impact of Rational Expectations

There are an enormous number of articles talking about the importance of RE. Most were written in the 1980s and most were written from a New Classical perspective. The readings contain a productive selection of these.

Required Readings

Lucas, Robert E., and Thomas J. Sargent (1979): "After Keynesian Macroeconomics." Federal Reserve Bank of Minneapolis Quarterly Review. Reprinted in Lucas and Sargent, eds., Rational Expectations and Econometric Practice. Minneapolis: University of Minneapolis Press, 295-319.

Sargent, Thonas J. (1996?): "Expectations and the Nonneutrality of Lucas." Mimeo: Stanford.

Supplementary Readings

McCallum, Bennet T. (1980): "Rational Expectations and Macroeconomic Stabilization Policy." Journal of Money, Credit, and Banking, 12(4):716-746.

Sargent, Thomas J.  (1982): "Beyond Demand and Supply  Curves in Macroeconomics." American Economic Review, Papers and Proceedings, 72(2):382-389.

Sargent, Thomas J. (1980): "Rational Expectations and the Reconstruction of Macroeconomics." Federal Reserve Bank of Minneapolis Quarterly Review, Summer. Reprinted in Preston J. Miller, ed., The Rational Expectations Revolution. Readings from the Front Line. Cambridge, MA: MIT Press.

Fellner, William (1980): "The Valid Core of Rationality Hypotheses in the Theory of Expectations." Journal of Money, Credit, and Banking, 12(4):763-787.

Barro, Robert J. (1984): "Rational Expectations and Macroeconomics in 1984." American Economic Review, Papers and Proceedings, 74(2):179-182