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Imperfect information in macroeconomics

Author

Listed:
  • Paul Hubert

    (Observatoire français des conjonctures économiques)

  • Giovanni Ricco

Abstract

This article presents some recent theoretical and empirical contributions to the macroeconomic literature that challenge the perfect information hypothesis. By taking into account the information frictions encountered by economic agents, it is possible to explain some of the empirical regularities that are difficult to rationalise in the standard framework of full information rational expectations. As an example, we discuss how the sign, size and persistence of the estimated effects of monetary and fiscal policies can change when the informational frictions experienced by economic agents are taken into account.

Suggested Citation

  • Paul Hubert & Giovanni Ricco, 2018. "Imperfect information in macroeconomics," Sciences Po publications info:hdl:2441/7rrg4irjh79, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/7rrg4irjh79549mkjh27en0pos
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    References listed on IDEAS

    as
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    Cited by:

    1. Alistair Macaulay, 2022. "Heterogeneous Information, Subjective Model Beliefs, and the Time-Varying Transmission of Shocks," CESifo Working Paper Series 9733, CESifo.

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    Keywords

    Infomational frictions; Imperfect information; Economic policy;
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