This paper explores the dynamics of the U.S. hog market with three different dynamic models that are distinguished only by their assumptions with regard to market participants' expectations of future prices. The first model assumes that all the producers in the market have rational expectations....

When the Central Bank sets nominal rates as a a non-decreasing function of the inflation rate to stabilize the economy, that is it uses a Taylor Rule, the zero lower bound on interest rates may result in multiple equilibria and a liquidity trap. However, if fiscal policy is non-Ricardian, or...