Macroeconomic Dynamics under Rational Inattention

Bartosz Maćkowiak and Mirko Wiederholt
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Mirko Wiederholt: Humboldt University Berlin

No 443, Computing in Economics and Finance 2006 from Society for Computational Economics

Abstract: This paper develops a general equilibrium model with Dixit-Stiglitz preferences, monopolistic competition and rational inattention on the side of both households and firms. We show how to solve a general equilibrium model with rational inattention. We use the model to study how rational inattention affects the impulse responses of macroeconomic variables to monetary policy shocks and technology shocks.

Date: 2006-07-04
New Economics Papers: this item is included in nep-cba and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecfa:443

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