ABSTRACT
The presence of stable underlying laws of motion is particularly hard to justify in situations where the expectations of individuals are influenced by the expectations of other individuals. With regard to future movements of the gold price different individuals are likely to have different expectations. The different expectations of the market participants in turn affect the price of the commodity in question. The attempt by the rational expectations approach to link expectations to so-called market fundamentals may be seen as an attempt to base expectations on a firm underlying structure. The expectations in question are the expectations of the entrepreneurs. Keynes is writing of an entrepreneur economy, in which the state of expectation of the entrepreneurs proximately determines the level of employment. A speculative market is therefore inevitably one in which different people entertain different expectations. In Keynes’s static and stationary models the short-period expectations of the wheat farmers played an equilibrating role.
