A strategic mechanism of price adjustment is introduced to explain inflations in the U.S. during 1909-1974. The mechanism follows from our theory that when the profit rate is above a normal-target rate, competitive forces operate to lower prices while if the profit rate is below the target a...

In previous models of rational belief equilibria (RBE), individual states of belief were the foundation for the construction of the endogenous state space where individual states of belief were described with the method of assessment variables. This leads to a lack of "anonymity" where the...

The purpose of this paper is to provide a non-technical exposition of the main conclusions of the theory of Rational Belief Equilibrium (RBE) for market volatility. It is argued that the theory of Rational Belief Equilibria (RBE) provides a unified paradigm for explaining market volatility by...