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Title:Cobweb theorems with production lags and price forecasting PDF Logo
Authors:Dufresne, Daniel
Vázquez-Abad, Felisa
Issue Date:2012
Series/Report no.:Economics Discussion Papers 2012-17
Abstract: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.
Subjects:Cobweb theorem
production lags
stable markets
price fluctuations
JEL:C02
C62
C65
D58
E32
Creative Commons License:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Working Paper
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Discussion Papers

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