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Multi‐Frequency Cobweb Model: Decomposition of the Hog Cycle
Author(s) -
Talpaz Hovav
Publication year - 1974
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1239345
Subject(s) - fourier series , series (stratigraphy) , fourier transform , amplitude , decomposition , economics , econometrics , lag , harmonic , production (economics) , control (management) , distributed lag , business cycle , mathematical economics , mathematics , computer science , microeconomics , macroeconomics , mathematical analysis , physics , biology , paleontology , ecology , computer network , quantum mechanics , management
The Cobweb Theorem and the harmonic motion models are extended and integrated to form a multi‐frequency cobweb model explaining the U. S. hog production cycle. The cycle is estimated by a finite, time‐based Fourier Series allowing amplitude and frequency analysis. Six different cycles are discovered operating simultaneously in the attempt to reach a market equilibrium. An independent distributed lag model is estimated, verifying the fundamental hypothesis of the model. The implication is that improved industry performance can be efficiently achieved by control policies to dampen the harmful long period cycles, leaving the short ones unaffected.