Review

This article was originally presented as a speech to Junior Achievement of Arkansas, Inc., Little Rock, Arkansas, February 16, 2006.

Since New Hampshire introduced the first modern state-sponsored lottery in 1964, forty-one other states plus the District of Columbia have adopted lotteries. Lottery ticket sales in the United States topped billion in 2004, with state governments reaping nearly billion in net lottery revenue. 

The acceleration of labor productivity growth that began during the mid-1990s is the defining economic event of the past decade. A consensus has arisen among economists that the acceleration was caused by technological innovations that decreased the quality-adjusted prices of semiconductors and related information-communications technology (ICT) products, including digital computers. 

Expectations of the future play a large role in macroeconomics. The rational expectations assumption which is commonly used in the literature provides an important benchmark, but may be too strong for some applications. This article reviews some recent research that has emphasized methods for analyzing models of learning, in which expectations are not initially rational but which may ...