Journal ArticleDOI
Rational Expectations and the Theory of Price Movements
TLDR
In this article, the Stockholm School hypothesis is used to explain how expectations are formed in the context of an isolated market with a fixed production lag, and commodity speculation is introduced into the system.Abstract:
In order to explain fairly simply how expectations are formed, we advance the hypothesis that they are essentially the same as the predictions of the relevant economic theory. In particular, the hypothesis asserts that the economy generally does not waste information, and that expectations depend specifically on the structure of the entire system. Methods of analysis, which are appropriate under special conditions, are described in the context of an isolated market with a fixed production lag. The interpretative value of the hypothesis is illustrated by introducing commodity speculation into the system. 1. INTRODUCTION THAT EXPECTATIONS of economic variables may be subject to error has, for some time, been recognized as an important part of most explanations of changes in the level of business activity. The "ex ante" analysis of the Stockholm School-although it has created its fair share of confusion-is a highly suggestive approach to short-run problems. It has undoubtedly been aread more
Citations
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Journal ArticleDOI
Rules Rather than Discretion: The Inconsistency of Optimal Plans
TL;DR: In this paper, it was shown that discretionary policy does not result in the social objective function being maximized, and that there is no way control theory can be made applicable to economic planning when expectations are rational.
Journal ArticleDOI
Dividend Policy, Growth, and the Valuation of Shares
TL;DR: In this paper, the effect of differences in dividend policy on the current price of shares in an ideal economy characterized by perfect capital markets, rational behavior, and perfect certainty is examined.
Journal ArticleDOI
Customer satisfaction, market share, and profitability: Findings from Sweden.
TL;DR: In this paper, the authors question the economic benefits of improving customer satisfaction and question whether there are economic benefits to improving quality and customer satisfaction, and they also question the link between quality and satisfaction.
Journal ArticleDOI
Econometric policy evaluation: A critique
Journal ArticleDOI
Asset prices in an exchange economy
TL;DR: In this article, the authors examine the stochastic behavior of equilibrium asset prices in a one-good, pure exchange economy with identical consumers, and derive a functional equation for price as a function of the physical state of the economy.
References
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Journal ArticleDOI
The advanced theory of statistics
TL;DR: The Advanced Theory of Statistics by Maurice G. Kendall as discussed by the authors is a very handsomely produced volume which is one which it will be a pleasure to any mathematical statistician to possess.
Book ChapterDOI
Speculation and Economic Stability
TL;DR: In this article, the authors examine the effects of speculation on economic stability and show that speculative purchases and sales do not necessarily fall into this category, since the main motivation behind such actions is the expectation of a change in the relevant prices relatively to the ruling price and not a gain accruing through their use, or any transformation effected in them or their transfer between different markets.
Journal ArticleDOI
Optimal Properties of Exponentially Weighted Forecasts
TL;DR: The exponential weighted average can be interpreted as the expected value of a time series made up of two kinds of random components: one lasting a single time period (transitory) and the other lasting through all subsequent periods (permanent) as discussed by the authors.