Economical Expectation Theories with Quantitative Aspects: Case of Turkey and Kazakhstan

Abstract

Studies on the impact of individuals’ expectations about future on macroeconomic analysis are one of the significant subjects of economics. With the experiences obtained from each economic fluctuations, the economic expectation of the societies and the theories that explain those expectations come up again. Building expectation theories and measuring economic expectations of the societies become possible with the increasing importance of quantitative analysis in Economics. In this study, Adaptive Expectation and Rational Expectation theories are examined as a part of The Cagan Inflation Model; in Turkey and Kazakhstan, the effects of inflation expectations on Money demand are analyzed according to the Econometric terms. The findings indicate that inflation expectations in Turkey are adapted faster than in Kazakhstan and the findings also point out the importance of the controlling money supply for the struggling against inflation.