COBWEB THEORY, MARKET STABILITY, AND PRICE EXPECTATIONS

Contributors to cobweb theory include many leading economists of the twentieth century. From early beginnings in 1930, played a key role evolving perceptions market stability arising from recursive linear models with endogenous dynamics. The focal point this evolution is transition naive adaptive rational price expectations. After review prehistory, paper examines first wave initiated by Jan Tinbergen, Henry Schultz, and Umberto Ricci proceeds consider expectations second associated cycles commodity markets. modern discussions about equilibrium connection processes assessed.