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New Classical School (Rational Expectation Theory)

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New classical school (Rational expectation theory)
                 -      Rational expectation theory on quantity theory of money

                 -      Rational version on quantity theory of money
                 -      Radicalist version on quantity theory of money
                 -      Radicalist version on quantity theory of money
                 -      Lucas version on quantity theory of money
The term rational expectation is used in economics only since 1961 by John Muth (American economist) by publishing an article “Rational expectation and price movement”. So, he is also considered as the father of rational expectation revolution.
But, the concept and term “Rational expectation” is widely used, highly developed and made more popular by an American economist Robert Lucas in 1972 by publishing an article called “Expectation and neutrality of money” and award Nobel prize in 1995. Lucas is also known as the lender of new classical school of economic thought.
The theory says that peop…