Price expectations, disequilibrium adjustments, and macroeconomic price stability

dc.contributor.author	Burmeister, Edwin	en_US
dc.contributor.author	Turnovsky, S. J	en_US
dc.date.accessioned	2010-03-09T15:32:08Z
dc.date.available	2010-03-09T15:32:08Z
dc.date.issued	1978	en_US
dc.identifier.uri	http://hdl.handle.net/10161/1938
dc.description.abstract	In two previous papers we have discussed the formulation of a logically consistent adaptive-type price expectations mechanism in continuous time and have applied our results to derive sufficient conditions for dynamic price stability in a variety of economic models (Burmeister and Turnovsky [5, 2033. In all cases the sufficient conditions for stability entail a “slow” rate of adaptation which implies a consistent error in the direction of the forecasted versus actual price movements. This is a highly undesirable feature since one cannot realistically expect economic agents to persistently predict in the wrong direction !	en_US
dc.format.extent	3691683 bytes
dc.format.mimetype	application/pdf
dc.language.iso	en_US
dc.publisher	Journal of Economic Theory	en_US
dc.subject	price expectations mechanism	en_US
dc.subject	saddlepoint instability	en_US
dc.title	Price expectations, disequilibrium adjustments, and macroeconomic price stability	en_US
dc.type	Journal Article	en_US
dc.department	Economics