Inattention to rare events

Bartosz Maćkowiak and Mirko Wiederholt ()

No 1841, Working Paper Series from European Central Bank

Abstract: The world recently experienced several rare events with disastrous consequences: the global financial crisis, the European sovereign debt crisis, and the Fukushima nuclear accident. These events have in common that key decision-makers were unprepared for them, which aggravated these events. We develop a model in which agents make state-contingent plans JEL Classification: D83, E58, E60

Keywords: disasters; efficiency; rare events; rational inattention (search for similar items in EconPapers)
Date: 2015-08
Note: 1026376
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Inattention to Rare Events (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20151841

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