Cagan's adaptive mechanism for explaining expectations of inflation has sometimes been criticized as an ad hoc formulation that is inconsistent with the hypothesis that expectations are rational. In this paper, we have showed that conditions exist under which adaptive expectations are fully rational.
Thomas J. SargentRelated topics
explaining formulation hypothesis inflation mechanism paper rational under conditionsRelated quotes
A man writes to throw off the poison which he has accumulated because of his false way of life. He is trying to recapture his innocence, yet all he succeeds in doing (by writing) is to inoculate the world with a virus of his disillusionment. No man would set a word down on paper if he had the courage to live out what he believed in.
Henry Miller
It is good to be a cynic - it is better to be a contented cat - and it is best not to exist at all. Universal suicide is the most logical thing in the world - we reject it only because of our primitive cowardice and childish fear of the dark. If we were sensible we would seek death - the same blissful blank which we enjoyed before we existed.
H. P. Lovecraft
Philosophy treats of physics where a more careful knowledge is required because the problems which come under this head are numerous... So the reader of Ctesibius or Archimedes and the other writers of treatises of the same class will not be able to appreciate them unless he has been trained in these subjects by the philosophers.
Vitruvius
