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"A Criticism of One Class of Macroeconomic Models with Rational Expectations," Journal of Money, Credit and Banking, 1978.

Paper: pdf file

This paper criticizes a class of models in which expectations are rational but agents do not maximize, an odd combination. Four types of models are distinguished: 1) the standard Keynesian model without rational expectations and without maximizing agents, 2) the basic model in 1974#5 without rational expectations but with maximizing agents, 3) a special case of this basic model--Chapter 7 in 1974#5--with both rational expectations and maximizing agents, and 4) the type of model criticized in this paper with rational expectations but without maximizing agents.