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Resuscitating the cobweb cycle
Author(s) -
SchenkHoppé Klaus Reiner
Publication year - 2004
Publication title -
journal of forecasting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.543
H-Index - 59
eISSN - 1099-131X
pISSN - 0277-6693
DOI - 10.1002/for.936
Subject(s) - rational expectations , economics , mathematical economics , rational agent , positive economics , econometrics , neoclassical economics
This article shows that permanent fluctuations in the cobweb model—though inconsistent with a rational expectations equilibrium—can be justified as being rational when reinterpreting the model in the theory of rational beliefs. Copyright © 2004 John Wiley & Sons, Ltd.