Ignorance may be optimal? Some welfare implications of rational versus non-rational expectations

Autor: Holmes, James M., Dowd, Michael R., Black, David C.
Zdroj: Journal of Macroeconomics; July 1995, Vol. 17 Issue: 3 p377-386, 10p
Abstrakt: We compare the lifetime utility of agents in a stationary non-rational expectations equilibrium to that obtained in a stationary rational expectations equilibrium. When government expenditures are financed by an inflationary tax, and agents in the non-rational expectations equilibrium underestimate inflation, it is shown that the non-rational expectations equilibrium is Pareto superior to the rational expectations equilibrium.
Databáze: Supplemental Index
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