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Rational expectations business cycle models: a survey

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  • Michael Dotsey
  • Robert G. King

Abstract

Development of rational expectations models of the business cycle has been the central issue in macroeconomics over the last 15 years. The postulate that expectations are rational imposes considerable discipline on business cycle analysis. In this essay we review the current literature on rational expectations models of business cycles with specific attention focused on the extent to which the rational expectations perspective has generated a new understanding of economic fluctuations.

Suggested Citation

  • Michael Dotsey & Robert G. King, 1988. "Rational expectations business cycle models: a survey," Economic Review, Federal Reserve Bank of Richmond, vol. 74(Mar), pages 3-15.
    • Handle: RePEc:fip:fedrer:y:1988:i:mar:p:3-15:n:v.74no.2
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    Cited by:

    1. Scheide, Joachim, 1989. "On real and monetary explanations of business cycles in West Germany," Kiel Working Papers 356, Kiel Institute for the World Economy (IfW Kiel).
    2. Olkhov, Victor, 2018. "Economic and Financial Transactions Govern Business Cycles," MPRA Paper 93269, University Library of Munich, Germany.
    3. Olkhov, Victor, 2018. "Economic Transactions Govern Business Cycles," MPRA Paper 87207, University Library of Munich, Germany.
    4. Joachim Scheide, 1989. "On Real and Monetary Causes for Business Cycles in West Germany," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 125(IV), pages 583-595, December.

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