Articles and Proceedings of the scientific conference among University students "Development and future of the science in Kazakhstan in the opinion of youth"
Browsing Articles and Proceedings of the scientific conference among University students "Development and future of the science in Kazakhstan in the opinion of youth" by Subject "economic behavior"
Expectations play a fundamental role in shaping economic behavior and outcomes. Since individuals and businesses cannot predict the future with certainty, they form expectations regarding future prices, income, investment returns, and government policies. These expectations influence consumption, saving, investment, and policy effectiveness. The paper explores the economic significance of expectations through three main dimensions: consumption and expectations, investment and expectations, and the role of expectations in public policy. Theories by Milton Friedman and Franco Modigliani are discussed, emphasizing the permanent income and life-cycle hypotheses, as well as the concept of rational expectations introduced by John F. Muth. The analysis shows that economic outcomes often depend on how individuals and firms interpret and react to information about the future, highlighting that accurate and stable expectations are crucial for achieving sustainable growth and effective macroeconomic policy.