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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.

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13y ago
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12y ago

Adaptive expectation is looking backward and Rational expectation is looking backward as well as gather information of current time.

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Q: What is the difference between rational expectation and adaptive expectation?
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