In Hens (1997), a new adjustment process is proposed for a setting with reopening spot and asset markets. He argues by means of an intemporal variant of Scarf's example that this process is more stable than the other processes, although in general it might be more stable or less stable. This note gives further evidence showing that Hens's process is indeed more stable. The results contradict some of the arguments of Hens (1997), which are corrected.
|Place of Publication||Tilburg|
|Number of pages||5|
|Publication status||Published - 1997|
|Name||CentER Discussion Paper|
- rational expectations
- general equilibrium