Consider a competitive economy with infinite horizon Ramsey behavior by households, present-value maximizing firms and infinitely many futures markets. If prices adjust according to excess demands, then the economy is locally stable. This is in marked contrast to the saddle-point instability exhibited by the myopic foresight dynamics in models of this genre. It is argued that infinite futures markets are idealizations of actual economic forces.
MLA
Heller, Walter Perrin. “Tatonnement Stability of Infinite Horizon Models with Saddle-Point Instability.” Econometrica, vol. 43, .no 1, Econometric Society, 1975, pp. 65-80, https://www.jstor.org/stable/1913414
Chicago
Heller, Walter Perrin. “Tatonnement Stability of Infinite Horizon Models with Saddle-Point Instability.” Econometrica, 43, .no 1, (Econometric Society: 1975), 65-80. https://www.jstor.org/stable/1913414
APA
Heller, W. P. (1975). Tatonnement Stability of Infinite Horizon Models with Saddle-Point Instability. Econometrica, 43(1), 65-80. https://www.jstor.org/stable/1913414
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