Are investment expectations rational, adaptive or regressive?

Chetan Dave

Research output: Contribution to journalArticlepeer-review


A unique previously unavailable dataset is employed to study the nature of expectations formed by manufacturing plants as they plan their own capital expenditures. Both conventional rational expectations and adaptive expectations hypotheses are found to be inconsistent with the data, which instead favor a regressive expectations formation process. These results, obtained using real-world data on plants, further develop the growing recent literature on survey expectations and the information about economic models that can be gleaned from them. (JEL E22, C23, C83)

Original languageEnglish (US)
Pages (from-to)212-225
Number of pages14
JournalEconomic Inquiry
Issue number1
StatePublished - Jan 2011

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics


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