TECHNICAL CHANGE AND FORMATION OF EXPECTATIONS

The aim of this paper is to discuss the implications for the process of expectation formation as developed by Keynes and the Post‐Keynesians when technical change (as understood by the Evolutionary and Institutional school of thought) is taken into account. The claim made here is that the traditional division of expectations in short and long period is insufficient to deal with all features of technical change, and thus, a new type of expectations (medium‐period) is proposed. Moreover, it is claimed that the independence among different types of expectations cannot stand when medium‐period expectations are taken into account.