“Cagan’s adaptive mechanism for explaining expectations of inflation has sometimes been criticized as an ad hoc formulation that is inconsistent with the hypothesis that expectations are rational. In this paper, we have showed that conditions exist under which adaptive expectations are fully rational.”

—  Thomas J. Sargent

"Rational expectations and the dynamics of hyperinflation." 1973

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Thomas J. Sargent 10
American economist 1943

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