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Price expectations, disequilibrium adjustments, and macroeconomic price stability

dc.contributor.author Burmeister, Edwin
dc.contributor.author Turnovsky, SJ
dc.date.accessioned 2010-03-09T15:32:08Z
dc.date.available 2010-03-09T15:32:08Z
dc.date.issued 1978
dc.identifier.uri https://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 !
dc.format.extent 3691683 bytes
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.publisher Journal of Economic Theory
dc.subject price expectations mechanism
dc.subject saddlepoint instability
dc.title Price expectations, disequilibrium adjustments, and macroeconomic price stability
dc.type Journal article


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