O.d.abdalhasin Anbuge *: rational expectations ..oaltenba economic fluctuations

- PUBLISHED IN 10/14/2015

Intellectual crisis in 1964 landmarks appeared when he used the US President (CAD) method of tax cuts to stimulate aggregate demand at a time when the economy which is suffering from slowing growth, and expectations were optimistic the increasing impact of the multiplier Keynesian to increase aggregate demand and address the problem in the same doses familiar, not It turns out that the economy has grown slowly tougher after tax cuts. Votert thus doubts about the predictability of the behavior of variables depending on the Keynesian theory Tools, and then underwent economic ideas are important changes in the seventies of the last century, which suffered the Keynesian theory that prevailed from difficulties in their accounts on the serious economic events, can no longer policy maker that manages the economy easily through desirable to reconcile the rates of inflation and unemployment Almottagabian the Phillips curve initial form and using certain modifications in the tools (demand management) such as taxes, government spending, subsidies, money supply, and what you leave these tools of the multiplier effect when changing rates, and when That was the Keynesian procedures more sophisticated in the management of the economy has increased the confidence of economists to predict the behavior of the possibility of macroeconomic variables and rates of inflation and unemployment (1) and put these rates in digital form (4-4-1) A 4% real GDP 0.4% unemployment growth of 0.1 % inflation ..

In the light of doubts emerged predictability School Alncodean led by (Milton Friedman) to emphasize the role of fluctuations in the money supply in the prediction of short-term fluctuations that get in the economy, and see this school need to find a basis for the stability of monetary growth (2). And comes their opinion as a result of uncertainties effectively manage demand so they tend to (Allaharih to act) to manage money, any call to stabilize money growth as the best way to reduce fluctuations in production, and that was the look Alncodeon focus on the money supply more than others from other economic variables only It was the first entrance to think about the creation of fixed rules to replace the freedom which tarnished by the developments and economic changes, and for the shortcomings of the market and stay away from the conditions of competition and not to the work of the classical mechanism, they then attempt to restrict or connect or create uniformity in variable movement is believed to be important (money supply) and then try to recall that known in economic thought constants have changed and need to be linked to fixed rules, and this is what will withdraw to Econometrics models leading to low morale (signification) the (X s) as described in Part stereotyped or regular relationship in the deltoid and the growing importance of moral and edits the total effects of the many variables deleted from the form which appears in the track Mkura irregular random variable (u). And it was the first thing that raised doubts about the possibility of predicting the behavior of variables through the usual behavioral models of the economy record, and began to think about the alternative most optimization, which put a question here (rational expectations). It will address the following paragraphs:

First: the transition from position to position to make sure not to make sure:

Through the proposed rules by the unique Mannion (3) will be the transition from the uncertainty (uncertain) to the case to make sure (certain) you and the type and result of any economic policy that the government has adopted, and the possibility of the private sector to adapt to these policies through including a forecast of rationality makes economic environment less turbulent and more certain government actions and more credible in light of the style of installation rules, (monetary base, tax base, budget) and abandon the troubled and unexpected responses between the government and the public behavior base.

Changes which gained over time as part of the events economic, and which may be due to transitions demographic and other ideological or institutional and economic prevailed in the labor market has made assumptions average natural no longer exist and then, any attempt to bring unemployment to normal levels Stqayd inflation and will not succeed in maintaining Always the lowest rate of natural unemployment rate and may arrange for these changes push the economy into a new crisis of thought known in the seventies crisis of economic thought, represented by unemployment in conjunction with inflation in what is known inflation cholestatic Stag flation, and so Thait appropriate ground for the birth of rational expectations.

Third: adaptations and rational expectations need to change the face of the constants: (4)

The birth of rational expectations were not difficult and were not a matter of scientific luxury, but reflect the inevitable and urgent need to address the parameters change under the adaptations and are not sure where she developed hypotheses Friedman - Phelps by Robert Lucas and Thomas Sir Gent and others, and was named additions to the economy of modern kidney, where Lucas stressed that the economic units (enterprises, workers, investors, consumers and others) tend to turbulence in the short term because of the uncertainty of the behavior changes in relative prices and the absolute, and this disorder is reflected in the curves of supply and demand totals two intraday great controversy between tendencies Alkinsaan and classic modern. While you stand commodity markets theory and the money behind the decline of the aggregate demand curve and is supposed to be (planned savings = investment scheme) as well as (the demand for cash = money supply) in accordance with the classical model, the supply of kidney curve behind him labor market where determines the labor supply and demand in real wages and the level of utilization rates, assuming the level of capital and technology is given, and both curves are influenced by price changes and there are other tendencies of the curves whenever prices have changed, but the questions raised by the rational expectations is that if the units various economic fully aware of the latest information and developments and possible actions and expected changes in prices, is going to be their response to price changes more or less volatility and confusion, and why? The responses will be less volatile inevitably because the creation of the reactions necessary to adapt to the new situation makes them less troublesome, and if they have fully aware of rising prices in the economy as a whole they have sufficient flexibility contracts will be able to reduce the display of the work in time for the subsequent wage rate of return ( caused by the change) to the first real rate which was prevalent and as well as the case for the employment level will return to where he was, and whether the workers who put their work responding to the increase in the price level as soon as the request installations of work, the supply curve kidney will be vertically, but if the workers were obliged For example, long-term contracts, the ability to adapt will be lower and slower and will supply curve kidney tilted to the top for a short period, the responses that followed adaptations have an impact on supply curves and inevitably demand, and so the expectations of rationality and religious duties and the terms of its important impact on the In those adaptations draw a shape and then curves in the results of the decisions taken and economic policies. That's when expectations are rational and decisive, but there remain unresolved questions may reduce the efficiency of expectations, for example, Matoul the time period covered by the decision taken by the (change)? What flexible wages and prices? What speed the liquidation of the market? If wages were fixed and less flexible than product prices, the workers may speculate prices out of the market by high esteem wage equilibrium, and whether it would reduce the importance of rational expectations by adopting the style of appreciation this ?, In fact, the importance of this method will remain reserved as long as the expectations that will Tnmt Authority variables explained, will remain subject to the predictable and expected - Bug any prediction error - as long as it is calculated variables any have no Data data ready, and therefore the error prediction will come into him again what applies to mistakes behavioral model classic economic measurement, where must be a mistake to expect the requirement included (2 Б o.) (5) N ~. Because errors will be taken into account, the rational expectations based on the premise that the economic units to repeat a commit the same mistakes, that is, they learn from previous experiences and this means on the level of the kidney that workers do not continue to commit the same mistakes of the past theory, so the forced unemployment will not last long because the prevailing wage and wage expectations will adapt to pay Use the level to the upside and this drives the supply curve Short-term kidney oblique to the top quickly to become vertically, and this is in line with the view of the Alncodeon that the last vestige of the request catalyst will be on prices at the arrival of production to the operating level full, while the Keynesians through their management of government believe they exercise the request in production in periods of deflation because the total supply curve tends to short-term top to the right and it may take many years to return his automatic vertical long-term. It also believes that production in the long term only grown through increased productivity.

The Mnzeroa rational expectations, they believe that the units' differing economic which will have the tools and information Hour will not stay deceived or dupes for a long time as long as they will embody Ao enter their expectations based on the light of the information in the prescribed and interpreter for the behavior of or situation variable under the action is taken or the decision or the government's economic policy (6), which gives economic units larger adaptive ability, and that the introduction of expectations rationality into account will make economic units is less harmful than government decisions because they are willing to adapt and expecting rationally to changes, from another angle, may result in the introduction of expectations rationality to make government decisions less influential and effective in changing the behavior of economic agents about the desired destination by the government because they Tspin her, or to influence and adapt to the conflict will depend on the ability of the parties concerned to take the conditions and assumptions rational expectations and Aleh applied, and therefore no longer Today in the world of adaptations of government economic policies and clear-cut as in the past in demand management framework effects, and no longer responses swift and decisive economic units and that economic cycles are no longer very ends of the gradient as in the past, but have become upper ends (periods of recovery) world and the ends ( recessions) flatter and with after a longer time and their effects in less severe economic life, Expectations rationality the day provided an opportunity to take all the reasons to adapt and mitigate the session, as already shown in Figure (1) in the first chapter that illustrates the nature of economic cycles under the adaptations and expectations Under rational thought and policies that prevailed before.

Fourth: the inevitability of diving at random and how rational expectations:

Adaptive measures:

That to walk of the actual level to the desired any of the macro-economic variables level adaptive measures their size depends on the size of the gap between the two levels, the required Valtkayvat to make wages today () equal to the wages of yesterday's warrant to be adjustment coefficient (E) size, which covers the gap between the full employment level and the actual operating level N, where: (7)
.......... If E = 1 full Adaptation and if E = 0 there is no justification to adapt because () and so the (O et: error prediction for variable ut
(5) .........
It-1: information available until the end of the period t-1
(4) ..........
And because x, s no longer explain y, s efficient for reasons of heart economic thought and changes I mentioned earlier, it became necessary to dive into the U, s through the prediction or expectation, and in order to be the expectation Aklamy to be linked to-date information and other hypothesis that I mentioned earlier,
(3) ... Y, S = F (X, S, U, S)
(2) How rational expectations:
(2) ..........
Through sports be treated:

The conditional expectation for the prediction error is zero because it reflects the last period (t-1), which is supposed to be known to the forecaster, and if his prediction information, it will be his conditional expectation now is exactly the same does not change, verifies the condition the following:

Statistical independence elements of mistakes predict, any lack of reliability of prediction errors, which we want to these errors are random chance completely and not associated with any available information on the economic units, so that if the associated information could have been predicted rational transferred from ut to the regular part of the function Vidam expectation Part of the changing behavior of the interpreter is in the forecast. Ie: By going into ut including available information can be extracted (Z 1 ... ..n) of variables that will be added to the X, s already in the classic standard model, and because the X, S did not explain Y, s efficient as they were in past due to the changing rules of the game and change the economic and change constants environment, and now in order to approach the dependent variable more must enter (Z s) with (X, S) ​​to the standard model containing the rational expectations, and will be the difference between yc classical pattern and YR model rational expectations, reflecting the amount of clarification to add an application style of rational expectations, and then the amount of adjustment required in order to match the interests of economic units with the objectives of government decisions.
(3) .........
Where we have the equation (3) are: asking (3), (6) we get (E), where E: how much they are adding rational expectations of situating (the amount of the required adjustment) (3): quantization variables and the inevitability of diving in the random mechanism.

Extracted from Ut variables will usually not calculated variables, no systematic data are not available and the time her series, and then can not be entered in the standard model, which makes the researcher felt compelled to resort to other methods to muzzle these variables, and may be a simulation method (Simulation ) to generate data serve statistical than serve the economic, because the data generated in this way are governed by statistical terms may not be realized in the economic reality, it may be quantitative expression economic reality closer to the accuracy if discretionary style of experts adopted and experts in the field under study, and this There discretionary methods: (9)
When YR match with the actual size of the Y will happen in the future, any that will prevail after you take a range of economic events after the time of adjustment decision-making, the rational expectations may be achieved.
(6) ... ..
Hence the link between the convictions of all economic units in private, and the actual Altsadwi desired behavior of the system, and this is the essence of rational expectations approach.
Aldelfih way:

And came this way to avoid the absence of data through a discretionary style in the forecasting process, to answer the question how to improve the forecasting methods in the absence of reliable data, it is by subjecting the expert opinions of the secret and confidential and there is a broker plays the role of coordinator and controlling The interrogations analysis cast by experts, and being the mediator of this process in several rounds, and this procedure will ensure access to the positions of neutral experts from the expected value of a variable, and by extracting an average of interrogations divergent can be obtained predictive value suitable Kmekdr acceptable, that the experts possess certain specifications.

Albezih way: where S and 1-S: weighted total weight equal to one .: appreciation classic (economic theory). According to figures will be: Assuming he gave weight to 80% to estimate the pre-researcher and weight weighted 20% to estimate the classic. Fifth: rational expectations .. the housing problem in Iraq a model 1. in terms of the time factor (Z1): Second, in terms of the difference between the size It expected the decision and after its real size version ( Z2 ): where are always expected her promoter and conditions easier than the conditions that actually will be issued, where the growing residential unit price is expected after taking into account the infrastructure that is the responsibility of the government cost. 3. Built the private sector does not continue its forecast on the decision (Z4): 4. Alorbakat likely to come from the executive (Z5): 5. Rings on the macro-economic level (Z6): 6. It is likely to come from the private sector units themselves Alorbakat:

Even assuming an increase in the housing supply through investment, it must coincide with a large government spending for the provision of various municipal services and electricity, health, educational and at the palaces of the government sector about it, which is what actually will happen because the one million housing units and Bafterd to rate Family is (5) people, the infrastructure and public services is supposed to pay tribute and held for 5 million people, the level of the souls of the State of Jordan size if the Iraqi people to live a decent its level, and this is not possible in the short and medium term with the existence of financial corruption , which makes this repulsive areas of demand towards the old areas and old role available the services, remain the problem list, and if the government wanted to provide public services they will face obstacles in funding or resort to unusual sources of funding resulting in higher inflation rates precedes the anticipated increase in Showing services, and both possibilities will result in them disappointed investors, who have spent huge amounts of money in building this land that will remain neglected, and back again acceleration in prices of residential units in areas where the general government services.

Implementation of the resolution will pass many of the administrative loops and Alrotineh are exposed to many forms of corruption, extortion and bribery and perhaps even deliberate delay of the foil, and all these things need to be strictly monitored and strict is currently, otherwise the implementation of the resolution will be minor, and turns on the correct destination to the views enhance disappointment hope among the public and lose confidence over government decisions recedes slowly demand for these housing units before the start of the project and is facing the problem of investor in the market study and by extension, its ability to implement the project because it will be reflected in investor funding crisis under the underdeveloped banking system does not provide significant funding for development opportunities.

The loss of confidence by private sector entities continuity of the decision or he Septr or it does not performs as wanted through the conclusion of new conviction is based on a long history of repeated information about the decisions have not been implemented or partially implemented or is no longer economically feasible use of them due to get financial economic changes and cash spent on the feasibility of the decision or that he has information on the potential Alorbakat that will appear in the mechanism of implementing the resolution.

All of these prospects made the prices of the role of housing goes down or prove at least initially by optimism, that is, expected inflation of prices was less than the actual inflation, is expected to display will grow steadily due to the expansion in the construction by investors and by the competition for marketing residential units, this It's making the value of the property transformed from being been driven by the high cost of owning the land and then built to the construction costs incurred by the investor plus margin profit, any of the value of the land to build value built on them, prompting consumer tastes change toward the purchase of apartments in the vertical construction and not the land to build a house, and agreed thing remains the real estate under the full implementation of the resolution will drop their prices in the long term certainly, but keep betting on the amputation of the decision or get variables Taaksh and obstacles to its implementation is possible other strongly and cash balances that were chunky and went to the demand for units may carry an inflationary monetary dimension is going the opposite direction to those who wanted to wait for the best opportunity to buy, and toward OK for the investor it serves inflation after the completion of construction or speculation.

2. Terms of the decision (Z3):

Usually rumors be more imaginative and ambitious than the real action that happens after the implementation of the resolution, the more the big difference was projected his effects before its release is greater than the effects that you will get after its release, the decision million housing units was while today being one hundred thousand only stuttering Even in the clearance of the site.

That the party that will be issued the resolution will get him on the reactions to the actions of individuals and property prices before its release due to promotion in advance among the public through various kinds of rumors and usually growing size of the event in the rumor with him in fact, then the expected impact of the building starts on rumors prior declining as they delayed the decision over, leading to a loss of confidence over the resolution is reflected negatively on the projected his effects after issuance, and this situation Atadh the public in the former regime period and siege where there is a legacy of uncertainty between the government and the public is still growing, where are always rumors for the upcoming government actions echo a broader process of those proceedings caused by the time factor (delayed action.), where slowed implementation did not proceed foreign construction companies several years ago and not just projects still designs on paper.

I have exacerbated the housing problem in Iraq and has widened the gap between the supply of housing and the demand for it, which was reflected in the large gains in the real estate and residential units prices as well as high rents, which became accounts for most of the entry of individual tenants in the underdeveloped economy of Iraq such as the economy and cope with the structural Achtlalath and financing and intellectual, external variables leave their mark on the behavior of economic its activities and the same applies for other economies, Kaladljh and liberalization and globalization, as well as being an economy suffering from the heavy legacy of the former dictatorial regime and seeks to shift from a centrally planned economy to a market economy, not to mention the problems associated with political transition and learn the game of democracy and devolution of power and the accompanying violence and practices and to engage in new wars with terrorism and other threats and instability, all of that makes the government's economic decisions degrees of highly variable by economic units in the private sector responses, and these disparate responses the result of a lot potential Alorbakat and uncertainty, and the uncertainty and lack of Almilloutih and breadth of the importance of variable Altsadwi u, s)) in the interpretation of the dependent variables behavior and the low importance of the systematic part and stereotyped relationships deltoid, and government decision expected - under the expectation of rational and adjustment taken in 2010, and these lines are written in 2013- is (bringing in investors broad investment in the housing sector and the construction of one million housing units and a mechanism for the marketing of units affordable to the public). We believe that the decision was a lot of hyperbole optimism is based on luring Digital may take us away from the truth and the size of the absorptive capacity for investment and investment possibilities bodies that are still young, how will adapt to this decision and how to achieve its goals, and economic -as we mentioned above, the counselor of by economic units, if asked by government units advice on the application and wanted to apply the hypothesis of rational expectations, it will demand that there be credibility in the adoption and implementation of the resolution in order to increase public confidence in him and fulfill the objectives and exceed the previous execution and mistakes to take over a reasonable time and be decisive and final and not amputated last decision of the midway and adapt other monetary policies and fiscal policy of land administration and others to serve the implementation of the resolution to impart recipe confidence and decisiveness and continuity and be taken advantage of available information in order to size the resolution to be compatible with the ability to implement it and other size of recommendations. But because we are now in the process adaptations private and government of the resolution sector will apply the example, assuming that the economic adviser by units of the private sector, but he applied rational expectations approach in an economy definitely needs for this method because of the random variables, it'll have to go into the u, s)) extraction and standardization of organization and what variables can be organized in the light of the information available (U t / I t -1) E and quantization extracted variables (z, s) to be used in the forecast and give advice, and will take the same variables symbols (Z1,2 ... .N) where they will face decision-making and implementation problems and potential disruption to fall significantly due to get a repeat of an earlier similar decisions Alorbakat and this will hinder the achievement of the goal and very government decisions as we shall see.?

B Base = 0.80 (0.90) +0.20 (0.80) = 0.88
BP: pre-estimate of the researcher

They also estimate judgmental because of the lack of measured variables, but the predicted here does not depend on the experts, but rather depends on the mixing objective classic estimate given by economic theory of the variable under study with appreciation discretionary researcher, Had convictions prior Researcher given to the variable estimate of 20%, and estimate based on a small sample of the data or some extracted numbers from questionnaires or from experts who have prior knowledge of the behavior of the variable and its growth rate if given the variable estimate of 80%, it experienced according to the method Albezih be estimated value is based on the weight which gives him a researcher for each of the the two estimates that the total estimated weights equal to 100%, ie

Assuming no access control and governmental follow-up to the implementation of resolution (Z7):

If failed government units - and is the most likely and Quaa- The neglect of these units or because the private sector was able to buy their net worth in the context of a large administrative corruption, the investor may turn into bats lead to higher inflation rates caused by monetary inflation without increasing the offer.

You may buy condominiums rich and not the poor who are without housing ( Z8 ):

And this is through the conversion of all refined systematic errors in the past to the regular part of the function and through the information available until the hour of counseling, can point to the private sector on how to adapt to this government decision.

Footnotes: 1. Consider: Dr. Awad Fadhil Dulaimi, money and banks, Dar al-Hikma Printing Press and Publishing, Mosul, 1990, pp. 484-485.3. Consider: Dr. Awad Fadhil Dulaimi, money and banks, Dar al-Hikma Printing Press and Publishing, Mosul, 1990, pp. 484-485.5. For more see seen:

R.Dormbusch & S. Fischer & G.Sparks, Macroeconomics, Second conadian edition, Mc Graw-Hill, 1985, PP 554-561.
4. d. Abdel Moneim Sayed Ali, the former source.

2. d. Mr. Ali Abdel Moneim, delivered lectures on economics PhD students - Mustansiriya University, material macro-economic, academic year 1993/1994.

Thus, the acceleration of economic reforms undertaken by the Government today requires more credibility, accuracy, and set the time ceilings and justice to target glitches and not success stories, and that the target corrupt really losers really enemies really incompetent reform really, and verified tangible results to regain public confidence in the government and then accelerates a line of reform because the public trust if it will be rational responses based on rational expectations Vtnsaq desired direction that you want the forces of reform.

In short, all of these prospects and find out Zbebha and linked actions and decisions represent important information available that can organize a lot of the behavior of the random variable (ut) and when you enter the (Z, S) variables explained in the standard behavioral classical model, which was approved by economic theory and became Taatnl by the changes and economic crises, it is possible to get a rapprochement between the studied variable size under the expectation that will happen after the completion of the adaptive inherent economic events of government for the entire range of temporal and spatial and Majali decisions, and between the estimated variable size according to the method of rational expectations, but if he congruence between the estimated and the What will be the rational expectations have been met.

This makes owners of capital are reluctant to build housing units and taking profits through speculative units newly built, it would leave a negative impact Aaazem inflation and not more than the offer.

Consider: Dr. Adel Abdel Ghani lovable, ibid., P. 271.

Dr.. Goni just lovable, Mhazerat thrown a doctorate of economics students of Mustansiriya University, econometrics material, the academic year 1993/1994.

Mathematical processing by the researcher and adjustment equations were taken from:
Dornbusch S. & R. fischer, OP. Cit. P459.

Dr.. Goni just lovable, lectures Ph.D., ibid. (*) Counselor for Economic Affairs in the Prime Minister

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