On his Marginal Revolution blog, Tyler Cowen describes the recent "purge" in the trucking industry. The pandemic shift in demand towards goods, as opposed to services, produced a big increase in the demand for trucking, which in turn produced a huge response, including a big increase in the number of small trucking companies. Now that is all being reversed, precipitously, with trucking companies falling like flies--the purge.This all sounds very, very "cobwebby" to me. It was Muth's article criticizing the cobweb model that inspired Lucas' "rational expectations revolution." I am old enough to have learned the cobweb model in a principles course, but I don't know of any modern texts where it appears. We moderns have read Muth and know that rational expectations kill cobwebs.Let's
Topics:
kevin quinn considers the following as important:
This could be interesting, too:
Mike Norman writes Trade deficit
Mike Norman writes Bond market now pricing in one 25 bps rate cut by Fed in 2025
New Economics Foundation writes What are we getting wrong about tax
Sandwichman writes The more this contradiction develops…
On his Marginal Revolution blog, Tyler Cowen describes the recent "purge" in the trucking industry. The pandemic shift in demand towards goods, as opposed to services, produced a big increase in the demand for trucking, which in turn produced a huge response, including a big increase in the number of small trucking companies. Now that is all being reversed, precipitously, with trucking companies falling like flies--the purge.
This all sounds very, very "cobwebby" to me. It was Muth's article criticizing the cobweb model that inspired Lucas' "rational expectations revolution." I am old enough to have learned the cobweb model in a principles course, but I don't know of any modern texts where it appears. We moderns have read Muth and know that rational expectations kill cobwebs.
Let's syllologize:
If ratex is true, then no cobwebs.
Cobwebs.
Ergo, ratex is false.
qed