Myopic Behavior and Cycles in Aggregate Output. A Note on the Role of Correlated Quantity Adjustments / Myopisches Verhalten und der Konjunkturzyklus. Bemerkungen zur Rolle korrelierter Mengenanpassungen

Summary In pursuing their plans economic agents regularly have to adjust their pacing of orders, production, and deliveries in unanticipated ways. Information constraints turn many of these adjustments into myopic reactions to accelerations/decelerations observed in the activity level of suppliers and/or customers. For analyzing the resulting dynamics, this note suggests a macroeconomic model derived from the idea of representing the adaptive interdependencies in terms of a system of integrated service channels. It sheds new light on what happens in stages of strained/exhausted production capacity and implies the possibility of cycles in aggregate output due to imperfectly synchronized production processes.