Rational thinking under costly information—Macroeconomic implications

Orlando Gomes

Economics Letters, 2012, vol. 115, issue 3, 427-430

Abstract: The notion of optimized rational behavior in the formation of expectations is used in this note to study the dynamics of a simple macroeconomic model. In a setting where departures from stability are not possible under perfect foresight, the selection of an optimal degree of rationality may lead to the generation of long-term endogenous fluctuations.

Keywords: Expectations; Information acquisition; Inflation dynamics; Rationality; Endogenous fluctuations; Stability (search for similar items in EconPapers)
JEL-codes: C62 D84 E30 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:115:y:2012:i:3:p:427-430

DOI: 10.1016/j.econlet.2011.12.102

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