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Abstract

This paper studies a dynamic stochastic general equilibrium model with rational inattention. Decisionmakers have limited attention and choose the optimal allocation of their attention. We study the implications of rational inattention for business cycle dynamics. For example, we study how rational inattention affects impulse responses of prices and quantities to monetary policy shocks, aggregate technology shocks and micro-level shocks.

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Paper provided by Society for Economic Dynamics in its series 2008 Meeting Papers with number 1059.

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Date of creation: 2008
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Handle: RePEc:red:sed008:1059

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Find related papers by JEL classification:

• D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
• E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
• E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
• E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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26. repec:bla:restud:v:76:y:2009:i:1:p:223-251 is not listed on IDEAS
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1. Business cycle dynamics under rational inattention
   by Christian Zimmermann in NEP-DGE blog on 2011-05-02 16:13:59

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