Abstract
In this chapter, we consider three areas where the modelling of expectations has played an important role in the development of economic theory. First, we discuss the modem theory of the consumption function, and show the simplifications resulting from adoption of the rational expectations hypothesis. Next, the evidence on the role of expectations in the wage equation is presented from a number of studies. Finally, the ways in which expected capital gains are modelled by use of instrumental variables are reviewed.
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© 1985 K. Holden, D. A. Peel and J. L. Thompson
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Holden, K., Peel, D.A., Thompson, J.L. (1985). Other Single-equation Studies. In: Expectations: Theory and Evidence. Palgrave, London. https://doi.org/10.1007/978-1-349-17862-9_5
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DOI: https://doi.org/10.1007/978-1-349-17862-9_5
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-35085-0
Online ISBN: 978-1-349-17862-9
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