| Article ID: | iaor200845 |
| Country: | United Kingdom |
| Volume: | 23 |
| Issue: | 8 |
| Start Page Number: | 621 |
| End Page Number: | 624 |
| Publication Date: | Dec 2004 |
| Journal: | International Journal of Forecasting |
| Authors: | Schenk-Hopp Klaus Reiner |
This article shows that permanent fluctuations in the cobweb model – though inconsistent with a rational expectations equilibrium – can be justified as being rational when reinterpreting the model in the theory of rational beliefs.