John Muth

John Muth is an economist best known for his work on how individuals make decisions using rational thinking combined with the influence of their expectations. His influential concept, called the "rational expectations" theory, suggests that people use available information efficiently to forecast future events. Muth's ideas helped bridge economic models with real-world behavior, emphasizing that expectations about the future can shape current economic outcomes. His work has deepened understanding of markets, especially in areas like monetary policy and business cycles, illustrating how individual forecasting influences economic fluctuations.