Cobweb theorems with production lags and price forecasting
Daniel Dufresne and
No 2012-17, Economics Discussion Papers from Kiel Institute for the World Economy
The classical cobweb theorem is extended to include production lags and price forecasts. Price forecasting based on a longer period has a stabilizing effect on prices. Longer production lags do not necessarily lead to unstable prices; very long lags lead to cycles of constant amplitude. The classical cobweb requires elasticity of demand to be greater than that of supply; this is not necessarily the case in a more general setting, price forecasting has a stabilizing effect. Random shocks are also considered.
Keywords: Cobweb theorem; production lags; stable markets; price fluctuations (search for similar items in EconPapers)
JEL-codes: C02 C62 C65 D58 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-for, nep-mac and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:zbw:ifwedp:201217
Access Statistics for this paper
More papers in Economics Discussion Papers from Kiel Institute for the World Economy
Contact information at EDIRC.
Series data maintained by ZBW - German National Library of Economics ().