Rational Expectations Dynamics: A Methodological Critique

Donald George, Les Oxley

Research output: Working paperDiscussion paper


This paper analyses RE macromodels from the methodological perspective.
It proposes a particular property, robustness, which should
be considered a necessary feature of scientiÖcally valid models in economics,
but which is absent from many RE macromodels. To restore
this property many macroeconomists resort to detailed and implausible
assumptions, which take their models a long way from simple Rational
Expectations. The paper draws attention to the problems inherent
in the technique of local linearisation and concludes by proposing
the use of nonlinear models, analysed globally.
Original languageEnglish
PublisherEdinburgh School of Economics Discussion Paper Series
Number of pages19
Publication statusPublished - 2013

Publication series

NameESE Discussion Papers


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