A hypothesis that supposes that expectations of future values of a variable can be based primarily on its values in the recent past.
Compare with rational expectations hypothesis
Example sentencesExamples
- First approach consists in applying the adaptive expectations hypothesis while in the second approach rational expectations are assumed.
- A logically consistent specification of the adaptive expectations hypothesis in continuous time is derived from an underlying discrete time model.
- A complete resolution of the model is carried out under the adaptive expectations hypothesis.
- The authors’ test results show that the German data are consistent with the adaptive expectations hypothesis and the Hungarian data are consistent with the rational expectations hypothesis.
- Other models of expectations formation, such as the adaptive expectations hypothesis, are briefly discussed.