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Myopic Behavior and Cycles in Aggregate Output. A Note on the Role of Correlated Quantity Adjustments / Myopisches Verhalten und der Konjunkturzyklus. Bemerkungen zur Rolle korrelierter Mengenanpassungen

Author

Listed:
  • Witt Ulrich

    (Max Planck Institute for Research Into Economic Systems, Kahlaische Straße 10, D-07745 Jena)

  • Sun Guang-Zhen

    (Faculty of Social Sciences and Humanities, University of Macau, P.O.Box, 3001, Macau)

Abstract

In pursuing their plans economic agents regularly have to adjust their pacing of orders, production, and deliveries in unanticipated ways. Information constraints turn many of these adjustments into myopic reactions to accelerations/decelerations observed in the activity level of suppliers and/or customers. For analyzing the resulting dynamics, this note suggests a macroeconomic model derived from the idea of representing the adaptive interdependencies in terms of a system of integrated service channels. It sheds new light on what happens in stages of strained/exhausted production capacity and implies the possibility of cycles in aggregate output due to imperfectly synchronized production processes.

Suggested Citation

  • Witt Ulrich & Sun Guang-Zhen, 2002. "Myopic Behavior and Cycles in Aggregate Output. A Note on the Role of Correlated Quantity Adjustments / Myopisches Verhalten und der Konjunkturzyklus. Bemerkungen zur Rolle korrelierter Mengenanpassun," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 222(3), pages 366-376, June.
    • Handle: RePEc:jns:jbstat:v:222:y:2002:i:3:p:366-376
    DOI: 10.1515/jbnst-2002-0306
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    References listed on IDEAS

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    1. Steven N. Durlauf, 1996. "Statistical Mechanics Approaches to Socioeconomic Behavior," NBER Technical Working Papers 0203, National Bureau of Economic Research, Inc.
    2. Masanao Aoki, 1995. "Economic Fluctuations With Interactive Agents: Dynamic And Stochastic Externalities," The Japanese Economic Review, Japanese Economic Association, vol. 46(2), pages 148-165, June.
    3. Scheinkman, Jose A & Woodford, Michael, 1994. "Self-Organized Criticality and Economic Fluctuations," American Economic Review, American Economic Association, vol. 84(2), pages 417-421, May.
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    Cited by:

    1. Ulrich Witt & Thomas Brenner, 2008. "Output dynamics, flow equilibria and structural change—A prolegomenon to evolutionary macroeconomics," Journal of Evolutionary Economics, Springer, vol. 18(2), pages 249-260, April.

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