NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Sticky-Information General-Equilibrium Model for Policy Analysis

Ricardo Reis

NBER Working Paper No. 14732
Issued in February 2009
NBER Program(s):   EFG   ME

This paper presents a dynamic stochastic general-equilibrium model with a single friction in all markets: sticky information. In this economy, agents are inattentive because of costs of acquiring, absorbing and processing information, so that the actions of consumers, workers and firms are slow to incorporate news. This paper presents the details of how an economy with pervasive inattentiveness functions, and develops a set of algorithms that solve the model quickly. It then applies these to estimate the model using data for the United States post-1986 and for the Euro-area post-1993, and to conduct counterfactual policy experiments. The end result is a laboratory that is rich enough to account for the dynamics of at least five macroeconomic series (inflation, output, hours, interest rates, and wages), and which can be used to inform applied monetary policy.

download in pdf format
   (510 K)

email paper

This paper is available as PDF (510 K) or via email.

This paper was revised on December 5, 2011

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Ricardo Reis, 2009. "A Sticky-information General Equilibrium Model por Policy Analysis," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.), Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 8, pages 227-283 Central Bank of Chile.

Users who downloaded this paper also downloaded these:
Mankiw and Reis w12605 Sticky Information in General Equilibrium
Mankiw and Reis w15773 Imperfect Information and Aggregate Supply
Mankiw and Reis w8290 Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve
Mankiw and Reis w8614 Sticky Information: A Model of Monetary Nonneutrality and Structural Slumps
Reis w11820 Inattentive Producers
 
Publications
Activities
Meetings
Data
People
About

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

Contact Us