| 单词 | cobweb |
| 释义 | cobweb A simple model used to illustrate the danger that time lags may introduce fluctuations into the economy. Suppose that the demand for a good is a decreasing function of its current price but, because of the time taken to plant and harvest crops, its supply is an increasing function of last year's price. The equilibrium price is where the supply and demand curves cross, but if price is not at this level in year 1, it will be above equilibrium level in year 2 if it was below in year 1, and vice versa. The price will thus oscillate, with increasing oscillations if the absolute slope of the demand curve is greater than that of the supply curve. This is not a realistic model: if the oscillations were as regular as it suggests, farmers would be able to predict what was going to happen and behave in a more sophisticated way. However, if there is also a random element to supply and/or demand, it may be difficult to detect the ‘hog cycle’ mechanism at work, and lags may help to magnify fluctuations in an industry. The horizontal axis shows quantity supplied and demanded; the vertical axis shows price. It is assumed that supply depends only on last year's price and demand depends only on this year's price. E is the equilibrium point where supply and demand are equal. Panel 1 shows the case where supply is more elastic than demand, that is, the absolute slope of the supply curve is less than that of the demand curve. A price of p0 in year 0 causes a supply of Oq1 in year 1, leading to a price of p1 at point B. This gives a supply of Oq2 in year 2, leading to a price of p2 at point D. This in turn leads to an output in year 3 further below E than p0. Price and output tend to move further from the equilibrium E, until the system runs into some form of constraint, such as the fact that neither p nor q can fall below zero. The case in Panel 1 is explosively unstable. Panel 2 shows the case where demand is more elastic than supply, that is, the absolute slope of the supply curve is greater than that of the demand curve. With corresponding labelling of points, price and quantity both approach the stable equilibrium E. |
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