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Durham University

Department of Theology and Religion

Profiles

Publication details for Dr Mark Hayes

Hayes, M. G. (2013). The State of Short-Term Expectation. Review of Political Economy 25(2): 205-224.

Author(s) from Durham

Abstract

The claim that Keynes makes a tacit assumption in Chapter 3 of The General Theory, that short-term expectations are fulfilled, is unwarranted and unnecessary. Kregel's seminal 1976 paper and its subsequent development by Chick and others have contributed to the general acceptance of this claim; these contributions are critically evaluated in the present paper. This critique clears the ground for a recognition that Keynes instead adopted the assumption of judicious foresight, which would now be called short-term rational expectations. That recognition in turn should encourage a reappraisal of Keynes's thought, by mainstream economists and others.