Download This PaperResuscitating the Cobweb Cycle
U of Zurich, Inst. for Empirical Economic Research Working Paper No. 123
8 Pages Posted: 16 Sep 2002
Date Written: July 26, 2002
Abstract
This note 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.
Keywords: Cobweb model, rational beliefs, rational expectations
JEL Classification: E32
Suggested Citation: Suggested Citation
Schenk-Hoppé, Klaus Reiner, Resuscitating the Cobweb Cycle (July 26, 2002). U of Zurich, Inst. for Empirical Economic Research Working Paper No. 123, Available at SSRN: https://ssrn.com/abstract=325980 or http://dx.doi.org/10.2139/ssrn.325980
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