Economic Research Institute Study paper
Utah State University
Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at email@example.com.
The 1970s and early 1980s were characterized by accelerating inflation associated with increasing levels of unemployment. The traditional demandpull and cost-push theories of inflation failed to satisfactorily explain the prevailing situation. Instead, a plausible explanation for this unusual economic occurrence was offered by the rational expectations theory. It could conceivably be argued that under the conditions of increasing uncertainty about future price movements, the economic participants may adopt rational type in favor of the traditional adaptive approach.
Saunders, Peter J., "An Inflation Forecasting Model for the 1980s" (1985). Economic Research Institute Study Papers. Paper 423.