Stability of Tâtonnement processes of short period equilibria with rational expectations

• Autores: Thorsten Hens
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 19, 1996
• Idioma: inglés
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• Resumen

  • In this paper we propose a new tâtonnement process of short-period equilibria with rational expectations: current period prices move proportionally to current period excess demand while future prices are formed according to the perfect foresight hypothesis. It is shown that this process is locally asymptotically stable if all godos are gross substitutes, or if the equilibrium has no trade. In general this process differs from a tâtonnement process in contingent contracts prices and from a tâtonnement of the Walrasian tâtonnement process it will be seen that the tâtonnement process we propose is more stable tan any other process investigated so far.