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March 26, 2005

In economics, adaptive partypoker expectations means that people base their expectations of what will happen in the future based on what has happened in the past. For example, if inflation has been high in the past, people would expect it to be high in the future.

In the theory of inflation, demand pull inflation and cost push inflation are usually short-lived shocks. However, a series of such shocks may lead people to assume that inflation is a permanent feature of the economy (especially if the shocks are large). In that case they will modify their economic behaviour accordingly, based on their heightened expectation of future inflation texasholdem rates. For instance, they may begin demanding larger (nominal) pay raises. This in partypoker itself acts as a cost push, leading firms to push their prices higher, especially since the firms themselves have similar expectations of inflation. This encourages another round of pay-raises. This partypoker merges with the "price/wage spiral" to build some inflation directly into the economy! The combination of the price/wage spiral and inflationary expectations reflecting the recent past's experience with inflation gives an economy partypoker built-in inflation.

The theory of adaptive expectations was popular in the 1980s, as an explanation of some aspects of the economic crisis that the West went through after the 1970s oil partypoker shock. The fact that some countries, particularly the UK, took until the 1990s to achieve stable low inflation rates again suggests there may well be something in the idea.

The theory of adaptive texasholdem expectations can be stated using the following equation, where pe is the next year's rate of inflation that is currently expected; pe-1 is this year's rate of inflation that was expected last year; p is this year's texasholdem actual rate of inflation,

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