1. THE CONCEPTUAL FRAMEWORK. The fact that trade and markets take place sequentially over time in actual economies is a trivial observation. It has nevertheless far-reaching implications. At any moment, economic units have to make decisions that call for immediate action, in the face of a future that is as yet unknown. Expectations about the unknown future play therefore an essential role in the determination of current economic variables. On the other hand, the expectations that traders hold at any time are determined by the information that they have at that date on the economy, in particular on its current and past states. Observed economic processes are thus the result of a strong and complex interaction between expectations of the traders involved and the actual realizations of economic variables.
KeywordsTemporary Equilibrium Future Market Calendar Time Spot Market Monetary Equilibrium
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