Skip to main content

Posts

Showing posts with the label New Classical School (Rational Expectation Theory)

New Classical School (Rational Expectation Theory)

New classical school (Rational expectation theory)                  -      Rational expectation theory on quantity theory of money                  -      Rational version on quantity theory of money                  -      Radicalist version on quantity theory of money                  -      Radicalist version on quantity theory of money                  -      Lucas version on quantity theory of money The term rational expectation is used in economics only since 1961 by John Muth (American economist) by publishing an article “ Rational expectation and price movement ”. So, he is also considered as the father of rational expectation revolution. But, the concept and term “ Rational expectation ” is widely used, highly developed and made more popular by an American economist Robert Lucas in 1972 by publishing an article called “ Expectation and neutrality of money ” and award Nobel prize in 1995. Lucas is also known as the lender of new classical school