Browsing by Author "Turnovsky, SJ"
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Item Open Access Capital deepening response in an economy with heterogeneous capital goods(1972) Burmeister, Edwin; Turnovsky, SJCapital deepening is an important con- cept in traditional capital theory. In a one-sector model it has an unambiguous definition, describing an increase in the physical capital-labor ratio...Item Open Access Perfect Foresight, Expectational Consistency, and Macroeconomic Equilibrium(1977) Burmeister, Edwin; Turnovsky, SJThis paper begins by introducing three alternative properties of expectations: weak consistency, strong consistency, perfect foresight. These concepts are then used to consider the relationship between beginnning of period equilibrium and end of period equilibrium for both discrete and continuous time. We show that in the former case the consistency between them requires not only that there be perfect foresight in predicting certain relevant variables but also that there can be no accumulation of assets. In the latter case the relationship between the two equilibria rests on much weaker conditions. They are equivalent provided expectations satisfy our assumption of weak consistencyItem Open Access Price expectations, disequilibrium adjustments, and macroeconomic price stability(1978) Burmeister, Edwin; Turnovsky, SJIn 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 !