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Rational Expectations And Econometric Practice, Volume 2-new Gary John A Portion Of The ProceedsAssumptions About How People Form Expectations For The Future Shape The Properties Of Any Dynamic Economic Model. To Make Economic Decisions In An Uncertain Environment People Must Forecast Such Variables As Future Rates Of Inflation, Tax Rates, Government Subsidy Schemes And Regulations. The Doctrine Of Rational Expectations Uses Standard Economic Methods To Explain How Those Expectations Are Formed. It Assumes That People Form Expectations In An