Publication details for Dr Mark HayesHayes, M. G. (2013). The State of Short-Term Expectation. Review of Political Economy 25(2): 205-224.
- Publication type: Journal Article
- ISSN/ISBN: 0953-8259, 1465-3982
- DOI: 10.1080/09538259.2012.729929
- Further publication details on publisher web site
Author(s) from Durham
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.