The Rational Expectations Hypothesis (REH) is critically assessed, focusing on the multiplicity question that arises in such modelling and the implications for a theory of endogenous fluctuations. The optimism associated with theories of the REM is also closely scrutinized.

It focuses in particular on the special class of equilibria generating small fluctuations around a steady state. Broadening the scope, the fourth part looks at the stability of cycles, sunspots in systems with memory, and current research on rational expectations.