NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Sticky Information in General Equilibrium

N. Gregory Mankiw, Ricardo Reis

NBER Working Paper No. 12605
Issued in October 2006
NBER Program(s):   EFG   ME

This paper develops and analyzes a general-equilibrium model with sticky information. The only rigidity in goods, labor, and financial markets is that agents are inattentive, sporadically updating their information sets, when setting prices, wages, and consumption. After presenting the ingredients of such a model, the paper develops an algorithm to solve this class of models and uses it to study the model's dynamic properties. It then estimates the parameters of the model using U.S. data on five key macroeconomic time series. It finds that information stickiness is present in all markets, and is especially pronounced for consumers and workers. Variance decompositions show that monetary policy and aggregate demand shocks account for most of the variance of inflation, output, and hours.

download in pdf format
   (364 K)

email paper

This paper is available as PDF (364 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12605

Published: N. Gregory Mankiw & Ricardo Reis, 2007. "Sticky Information in General Equilibrium," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 603-613, 04-05. citation courtesy of

Users who downloaded this paper also downloaded these:
Mankiw and Reis w8290 Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve
Mankiw and Reis w15773 Imperfect Information and Aggregate Supply
Reis w14732 A Sticky-Information General-Equilibrium Model for Policy Analysis
Mankiw and Reis w12024 Pervasive Stickiness (Expanded Version)
Mankiw and Reis w8614 Sticky Information: A Model of Monetary Nonneutrality and Structural Slumps
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us