The Economics of Adjustment
AbstractIn this paper we argue that many topics in macroeconomics can be viewed as part of the broader theory of the economics of adjustment. We argue that existing approaches to the economics of adjustment take a very narrow view of the role of information. We outline an approach to this topic that stresses the role of learning and information externalities, and discussed through examples how these concerns alter the qualitative nature of the adjustment process. In particular, there appears to be a general bias towards the underprovision of information in a variety of settings which leads to inefficient adjustment.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4687.
Date of creation: Mar 1994
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Publication status: published as in Rod Cross, ed., "The National Rate of Unemployment", Cambridge University Press, 1995
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Other versions of this item:
- Caplin, A. & Leahy, J., 1993. "The Economics of Adjustment," Discussion Papers, Columbia University, Department of Economics 1993_19, Columbia University, Department of Economics.
- Caplin, A. & Leahy, J., 1993. "The Economic of Adjustment," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1655, Harvard - Institute of Economic Research.
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- Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2007. "Non-price rigidity and cost of adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 817-832.
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