Endogenous economic policy - Rational expectations
3 important questions on Endogenous economic policy - Rational expectations
Under what condition are political business cycles possible?
Adaptive expectations
What is always the end result when governments try to influence the economy to maximize votes when assumed that the voters act rational?
The government is always worse off
Why is it assumed that politicians are voters when assumed that voters act rational?
Because when politicians have different interests than rational voters they always lose
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