Rational Expectations and Inflation (Harpercollins Series in Economics) [Paperback]

Thomas J. Sargent (Author)

Book Description

Publication Date: January 1993 | Series: Harpercollins Series in Economics

This collection of essays written by one of the founders and chief proponents of rational expectations theory is intended as a supplement for macroeconomics courses. Thomas Sargent applies rational expectations macroeconomics at an informal, non-econometric level to interpret a variety of historical and contemporary issues. Sargent uses inflation as a natural context for applying rational expectations theory. Government efforts to stop currency depreciation, alternative monetary systems and the conflict between monetary and fiscal policies are also explored.

Product Details

• Paperback: 275 pages
• Publisher: Harpercollins College Div; 2 Sub edition (January 1993)
• Language: English
• ISBN-10: 0065002806
• ISBN-13: 978-0065002805
• Product Dimensions: 8.3 x 5.3 x 0.4 inches
• Shipping Weight: 9.6 ounces
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #2,644,505 in Books (See Top 100 in Books)

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0 of 4 people found the following review helpful:

4.0 out of 5 stars ReaganBushonomics discussed, January 30, 2008

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Professor Joseph L. McCauley "Joseph L. McCauley" (Austria+Texas) - See all my reviews

This review is from: Rational Expectations and Inflation (Paperback)

Interesting book written by a monetarist, one of the main mathematical thinkers on the side of laissez faire. The 2nd chapter is worth the book. It discusses the Reagan-Bush aim to bankrupt the U.S. Gov't. by increasing the debt while decreasing taxes, but the main point is missed altogether because the actual path taken is not one of the two options discussed: to bust the budget, reduce taxes, and borrow the difference in the money market. The free market standpoint taken for granted in the book has led us to the point where the Dollar has been significantly degraded because of the trade deficit, and the trade deficit is due to loss of manufacturing capacity, first to Mexico, more recently to Asia. None of that is foreseen in the text. The book was written in the era when Reaganomics had first taken hold in the U.S. To summarize what was not foreseen, the order of magnitude of the trade deficit is now greater than the budget deficit, which means that China has more than enough money to lend us to finance what we fail to pay in taxes. The book discusses great inflations, but unfortunately leaves out the inflation of the Dollar after it was cut loose from gold in 1971. That inflation foreshadowed our current one, but in an era before our manufacturing capacity had been squandered away at the altar of deregulation and free trade. The section called 'some unpleasant monetarist arithmetic' is scientifically faulty, like most models in macroeconomics it's not even falsifiable.