This paper studies the dynamic volatility properties of a monetary economy in which agents hold Rational Beliefs (see Kurz (1994), (1997)) rather than Rational Expectations. Except for this feature the examined Rational Belief Equilibrium (in short, RBE) is entirely standard: markets are...

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...

1. Basic concepts for the theory of public investment -- 2. Methods of optimization over time -- 3. Optimal investment planning in a one-commodity model -- 4. Optimal investments in a two-sector model -- 5. Objectives, markets, and public instruments -- 6. Optimal policy and controllability with...