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Imperfect information in macroeconomics

Author

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  • Paul Hubert

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Giovanni Ricco

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

This article presents some recent theoretical and empirical contributions to the macroeconomic literature that challenge the perfect information hypo-thesis. 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," Post-Print hal-03458122, HAL.
    • Handle: RePEc:hal:journl:hal-03458122
    DOI: 10.3917/reof.157.0181
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03458122
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    References listed on IDEAS

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    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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