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Author: Romina Kazandjian Publisher: ISBN: Category : Inflation (Finance) Languages : en Pages : 159
Book Description
I propose a structural micro-founded sticky-noisy information model with high- and low-uncertainty regimes. Agents first appraise the state of uncertainty and only spend resources to update their inflation expectations if they perceive uncertainty as sufficiently high. Time-varying uncertainty affects expectation formation through two direct channels: 1) the wake-up call effect, which causes agents to pay more attention, increasing their quantity of information; and 2) the wait-and-see effect, which decreases their quality of information and prompts them to put less weight on new noisier information. Using structural estimation of alternative models with information frictions, I find that accounting for the indirect state-dependence channel, the proposed innovation of the model, better explains the observed information rigidity, since it considers the interaction between the two direct effects. A substantial amount of information rigidity is due to inattention, leaving ample room for policymakers to employ frequent, direct, and simple forward guidance to "pierce the veil" of inattention.
Author: Romina Kazandjian Publisher: ISBN: Category : Inflation (Finance) Languages : en Pages : 159
Book Description
I propose a structural micro-founded sticky-noisy information model with high- and low-uncertainty regimes. Agents first appraise the state of uncertainty and only spend resources to update their inflation expectations if they perceive uncertainty as sufficiently high. Time-varying uncertainty affects expectation formation through two direct channels: 1) the wake-up call effect, which causes agents to pay more attention, increasing their quantity of information; and 2) the wait-and-see effect, which decreases their quality of information and prompts them to put less weight on new noisier information. Using structural estimation of alternative models with information frictions, I find that accounting for the indirect state-dependence channel, the proposed innovation of the model, better explains the observed information rigidity, since it considers the interaction between the two direct effects. A substantial amount of information rigidity is due to inattention, leaving ample room for policymakers to employ frequent, direct, and simple forward guidance to "pierce the veil" of inattention.
Author: Mr.Olivier Coibion Publisher: International Monetary Fund ISBN: 1475519249 Category : Business & Economics Languages : en Pages : 55
Book Description
We propose a new approach to test the full-information rational expectations hypothesis which can identify whether rejections of the arise from information rigidities. This approach quantifies the economic significance of departures from the and the underlying degree of information rigidity. Applying this approach to U.S. and international data of professional forecasters and other agents yields pervasive evidence consistent with the presence of information rigidities. These results therefore provide a set of stylized facts which can be used to calibrate imperfect information models. Finally, we document evidence of state-dependence in the expectations formation process.
Author: Frank H. Knight Publisher: Cosimo, Inc. ISBN: 1602060053 Category : Business & Economics Languages : en Pages : 401
Book Description
A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.
Author: Jonas Dovern Publisher: International Monetary Fund ISBN: 1475587619 Category : Business & Economics Languages : en Pages : 24
Book Description
We examine the behavior of forecasts for real GDP growth using a large panel of individual forecasts from 30 advanced and emerging economies during 1989–2010. Our main findings are as follows. First, our evidence does not support the validity of the sticky information model (Mankiw and Reis, 2002) for describing the dynamics of professional growth forecasts. Instead, the empirical evidence is more in line with implications of "noisy" information models (Woodford, 2002; Sims, 2003). Second, we find that information rigidities are more pronounced in emerging economies than advanced economies. Third, there is evidence of nonlinearities in forecast smoothing. It is less pronounced in the tails of the distribution of individual forecast revisions than in the central part of the distribution.
Author: Romina Kazandjian
Author: Romina Kazandjian
Author: Mr.Olivier Coibion
Author: 
Author: Frank H. Knight
Author: Neil Rankin
Author: John J. McGall
Author: Jack Hirshleifer
Author: Neil Rankin
Author: Timothy Van Zandt
Author: Jonas Dovern