The true meaning behind the stochastic hypothesis which assert that e (ε)‎ = 0 ?

Abstract EN

The aim of this Paper is to examine the meaning about the classicalhypothesis which claim that the error of expectation equal zero, bymentioning all theories of expectations before and after the REH.

Therational expectations paradigm has dominated the field of economicsever since it was introduced some fifty years ago.

Recently research inheterogeneous expectations, bounded rationality, and models of learninghave gained leverage, and focus has shifted away from the rationalexpectations hypothesis.

Despite these developments over the past fewdecades, the rational expectations paradigm is still very much thestandard way of handling uncertainty in economic theory, and often therationality assumption is not seriously questioned.