
 ec813a_a.doc 
  Essentially it goes without saying today, not only that expectations (particularly inflation expectations) must be taken into consideration in the structure of any proposed macroeconomic model, but also that such expectations must be modeled as rational expectations. 
  Third, the time horizon over which an expectation is formed will depend on the problem for whose solution it is necessary to form the expectation, and the same person may easily have very different expectations about the course of prices over, for example, the next year and the next decade. 
  First, different individuals and other agents will, in general, form different expectations of the same varaible over the same future horizon; this means that some expectations are bound to prove wrong, which is contrary to the assumptions made in analyzing fully anticipated inflation. 
 www.msu.edu /course/ec/813a/rasche/ec813a_a.doc (843 words) 
