NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Money, Imperfect Information and Economic Fluctuations

Bruce Greenwald, Joseph E. Stiglitz

NBER Working Paper No. 2188
Issued in March 1987
NBER Program(s):   EFG

This paper summarizes the macro-economic and, in particular, monetary and financial market implications of recent developments in the micro-economic theory of imperfect information. These micro-economic models which lead to credit-rationing on the one hand and limitations in the availability of equity type financing on the other can account for a wide range of observed business cycle and monetary phenomena. These include (a) unemployment, (b) the existence of Keynesian-type multiples, (c) the observed lack of production smoothing in response to cyclical fluctuations in demand, (d) the impact of monetary policy on business activity despite the absence of significant changes in real interest rates, and (e) price rigidities which arise from rational firm decisions (not as an a priori assumption).

download in pdf format
   (339 K)

email paper

This paper is available as PDF (339 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2188

Published: Kohn, Meir and Sho-Chieh Tsiang (eds.) Finance constraints, expectations, and macroeconomics. Oxford; New York; Toronto and Melbourne: Oxford University Press, Clarendon Press, 1988.

Users who downloaded this paper also downloaded these:
Greenwald and Stiglitz w2093 Imperfect Information, Credit Markets and Unemployment
Greenwald and Stiglitz w2160 Keynesian, New Keynesian, and New Classical Economics
Greenwald, Stiglitz, and Weiss w1335 Informational Imperfections in the Capital Market and Macro-Economic Fluctuations
Greenwald and Stiglitz Macroeconomic Models with Equity and Credit Rationing
Stiglitz and Greenwald w4117 Towards a Reformulation of Monetary Theory: Competitive Banking
 
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