John Muth
| John Muth | |
|---|---|
| Born | September 27, 1930 |
| Died | October 23, 2005 (aged 75) Key West, Florida |
| Nationality | United States |
| Institution | Carnegie Mellon University |
| Field | Mathematical economics |
| School or tradition |
Carnegie School |
| Alma mater | Carnegie Mellon University |
| Influences | Herbert A. Simon |
| Influenced | Robert Lucas, Jr., Finn E. Kydland, Edward C. Prescott, Neil Wallace, Thomas J. Sargent |
| Awards | Alexander Henderson Award (1954) |
| Information at IDEAS / RePEc | |
John Fraser Muth (/mjuːθ/; September 27, 1930 – October 23, 2005) was an American economist. He is "the father of the rational expectations revolution in economics", primarily due to his article "Rational Expectations and the Theory of Price Movements" from 1961.
Muth earned his Ph.D. in mathematical economics from Carnegie Mellon University, and was in 1954 the first recipient of the Alexander Henderson Award. He was affiliated with Carnegie Mellon as a research associate from 1956 until 1959, as an assistant professor from 1959 to 1962, and as an associate professor without tenure from 1962 to 1964.
Muth asserted that expectations "are essentially the same as the predictions of the relevant economic theory." Although he formulated the rational expectations principle in the context of microeconomics it has subsequently become associated with macroeconomics and the work of Robert Lucas, Jr., Finn E. Kydland, Edward C. Prescott, Neil Wallace, Thomas J. Sargent, and others.
Two divergent approaches to economic modeling, which have later become cornerstones of modeling of economic systems, originated at the Graduate School of Industrial Administration (GSIA) at Carnegie Mellon in the late 1950s and early 1960s. At the same time as John Muth was developing the concept of rational expectations, Herbert A. Simon had been refining his ideas on bounded rationality, emphasizing people's limited computational abilities.
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