Muth (1961)
In contrast to Simon, Muth puts forward his hypothesis: "I should like to suggest that expectations, since they are informed predictions of future events, are essentially the same as the predictions of the relevant economic theory. At the risk of confusing this purely descriptive hypothesis with a pronouncement as to what firms ought to do, we call such expectations rational."
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Muth's notion was that the professors, even if correct in their model of man, could do no better in predicting than could the hog farmer or steelmaker or insurance company. The notion is one of intellectual modesty. The common sense is "rationality": therefore Muth called the argument "rational expectations". — McCloskey, Deirdre N. (1998). The Rhetoric of Economics (2 ed.). Univ of Wisconsin Press. pp. 53. ISBN 978-0-299-15814-9.Read more about this topic: John Muth