 |
|
| ||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||
|
|
|
|
|
| ||||||||
According to Lucas Critique, prediction based on historical data would be invalid if some policy change alters the relationship between relevant variables (such as private agents' rational expectations of inflation). If the policy change alters the relationship between the variables, than historical relationship between variable would differ from future relationship.
This notion was first set forth by Robert Lucas.
|
||||
| View Live Article | This article is from Wikipedia. All text is available under the terms of the GNU Free Documentation License | |
||
