Asymmetric information and macroeconomic dynamics
AbstractWe show how macroeconomic dynamics can be derived from asymmetric information. As an illustration of the utility of this approach we derive the equilibrium density, non-equilibrium densities and the equation of motion for the response to a demand shock for productivity in a simple economy. Novel consequences of this approach include a natural incorporation of time dependence into macroeconomics and a common information-theoretic basis for economics and other fields seeking to link micro-dynamics and macro-observables.
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Bibliographic InfoArticle provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.
Volume (Year): 389 (2010)
Issue (Month): 17 ()
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Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/
Macroeconomics; Asymmetric information; Fisher information; Productivity;
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