A01=Thomas J. Sargent
Adaptive expectations
Adaptive Expectations Hypothesis
Approximation error
Author_Thomas J. Sargent
Autocorrelation
Autoregressive model
Backward induction
Bayes' theorem
Bayesian
Calculation
Category=KCBM
Category=KCH
Category=KCP
Central bank
Coefficient
Decision rule
Disinflation
Econometric model
Econometrics
Economic equilibrium
Economics
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
Estimation
Estimator
Exponential smoothing
Forecast error
Forecasting
Free parameter
Inference
Inflation
Initial condition
John Muth
Kalman filter
Keynesian economics
Law of large numbers
Least squares
Linear regression
Loss function
Lucas critique
Macroeconomic model
Macroeconomics
Market price
Milton Friedman
Moment matrix
Moment-generating function
Monetary policy
Nash equilibrium
National Bureau of Economic Research
Natural rate of unemployment
Normative economics
Pessimism
Phillips curve
Positive economics
Preference (economics)
Price index
Prior probability
Rate of convergence
Rational expectations
Recession
Regime shift
Response Lag
Sacrifice Ratio
Seasonal adjustment
Standard error
State variable
Stochastic approximation
Stochastic process
Supply (economics)
Tax
Theory and History
Trade-off
Unemployment
Unemployment benefits
Unit root
Vector autoregression
Product details
- ISBN 9780691090122
- Weight: 255g
- Dimensions: 152 x 235mm
- Publication Date: 02 Dec 2001
- Publisher: Princeton University Press
- Publication City/Country: US
- Product Form: Paperback
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In the past fifteen years, inflation has been conquered by many advanced countries. History reveals, however, that it has been conquered before and returned. In The Conquest of American Inflation, Thomas J. Sargent presents a groundbreaking analysis of the rise and fall of U.S. inflation after 1960. He examines two broad explanations for the behavior of inflation and unemployment in this period: the natural-rate hypothesis joined to the Lucas critique and a more traditional econometric policy evaluation modified to include adaptive expectations and learning. His purpose is not only to determine which is the better account, but also to codify for the benefit of the next generation the economic forces that cause inflation. Sargent begins with an explanation of how American policymakers increased inflation in the early 1960s by following erroneous assumptions about the exploitability of the Phillips curve--the inverse relationship between inflation and unemployment.
In subsequent chapters, he connects a sequence of ideas--self-confirming equilibria, least-squares and other adaptive or recursive learning algorithms, convergence of least-squares learners with self-confirming equilibria, and recurrent dynamics along escape routes from self-confirming equilibria. Sargent synthesizes results from macroeconomics, game theory, control theory, and other fields to extend both adaptive expectations and rational expectations theory, and he compellingly describes postwar inflation in terms of drifting coefficients. He interprets his results in favor of adaptive expectations as the relevant mechanism affecting inflation policy. Providing an original methodological link between theoretical and policy economics, this book will engender much debate and become an indispensable text for academics, graduate students, and professional economists.
Thomas J. Sargent is Donald Lucas Professor of Economics, Stanford University, and Senior Fellow at the Hoover Institution at Stanford. He is the author of many articles and books on macroeconomic theory, most recentlyBounded Rationality in Macroeconomics.
