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What is the difference between rational expectation and adaptive expectation?
Wiki User
∙ 12y ago
Rational expectation are expectation formed by individuals based on past experience and on their predictions about the effects of present and future policy actions. Adaptive expectations are based only on the past and expected inflation changes slowly. by marowe f.m.
Wiki User
∙ 12y ago
Wiki User
∙ 12y agoAdaptive expectation is looking backward and Rational expectation is looking backward as well as gather information of current time.
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