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A Note on "Stability of Tâtonnement Processes of Short Period Equilibria with Rational Expectations"

Author

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  • Herings, P.J.J.

    (Tilburg University, Center For Economic Research)

Abstract

In Hens (1997), a new adjustment process is proposed for a setting with reopening spot and asset markets. He argues by means of an intemporal variant of Scarf's example that this process is more stable than the other processes, although in general it might be more stable or less stable. This note gives further evidence showing that Hens's process is indeed more stable. The results contradict some of the arguments of Hens (1997), which are corrected.
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Suggested Citation

  • Herings, P.J.J., 1997. "A Note on "Stability of Tâtonnement Processes of Short Period Equilibria with Rational Expectations"," Discussion Paper 1997-110, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:8e50c921-f26f-4fbe-8e24-34ed34f8783a
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    File URL: https://pure.uvt.nl/ws/portalfiles/portal/527882/110.pdf
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    References listed on IDEAS

    as
    1. Hens, Thorsten, 1997. "Stability of tatonnement processes of short period equilibria with rational expectations," Journal of Mathematical Economics, Elsevier, vol. 28(1), pages 41-67, August.
    2. Magill, Michael & Shafer, Wayne, 1991. "Incomplete markets," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 30, pages 1523-1614, Elsevier.
    3. Balasko, Yves, 1994. "The expectational stability of Walrasian equilibria," Journal of Mathematical Economics, Elsevier, vol. 23(2), pages 179-203, March.
    4. W. Hildenbrand & H. Sonnenschein (ed.), 1991. "Handbook of Mathematical Economics," Handbook of Mathematical Economics, Elsevier, edition 1, volume 4, number 4.
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    More about this item

    Keywords

    Tatonnement; stability; rational expectations; general equilibrium;
    All these keywords.

    JEL classification:

    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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