Optimal sticky prices under rational inattention

American Economic Review

Volumn 99, Issue 3, 2009, Pages 769-803

  Maćkowiak, Bartosz ^a   Wiederholt, Mirko ^b  

^a EUROPEAN CENTRAL BANK   (Germany)

^b NORTHWESTERN UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70149084997     PISSN: 00028282     EISSN: None     Source Type: Journal    
DOI: 10.1257/aer.99.3.769     Document Type: Article

References (39)

1. Akerlof, George A., and Janet L. Yellen. 1985. "A Near-Rational Model of the Business Cycle, with Wage and Price Inertia." Quarterly Journal of Economics, 100 (Supplement) : 823-38.
2. Angeletos, George-Marios, and Alessandro Pavan. 2007. "Effcient Use of Information and Social Value of Information. " Econometrica, 75(4):1103-42.
3. Ball, Lawrence, and David Romer. 1990. "Real Rigidities and the Non-Neutrality of Money." Review of Economic Studies, 57(2):183-203.
4. Bils, Mark, and Peter J. Klenow. 2004. "Some Evidence on the Importance of Sticky Prices." Journal of Political Economy, 112(5):947-85.
5. Boivin, Jean, Marc P. Giannoni, and Ilian Mihov. 2009. "Sticky Prices and Monetary Policy: Evidence from Disaggregated US Data." American Economic Review, 99(1):350-84.
6. Christiano, Lawrence J., Martin Eichenbaum, and Charles L. Evans. 1999. "Monetary Policy Shocks: What Have We Learned and to What End?" In Handbook of Macroeconomics. Vol. 1A, ed. John B. Taylor and Michael Woodford, 65-148. Amsterdam: North-Holland.
7. Christiano, Lawrence J., Martin Eichenbaum, and Charles L. Evans. 2005. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy." Journal of Political Economy, 113(1):1-45.
8. Cover, Thomas M., and Joy A. Thomas. 1991. Elements of Information Theory. New York: John Wiley and Sons.
9. Gabaix, Xavier, and David I. Laibson. 2000. "A Boundedly Rational Decision Algorithm." American Economic Review, 90(2):433-38.
10. ertler, Mark, and John Leahy. 2006. "A Phillips Curve with an Ss Foundation. " National Bureau of Economic Research Working Paper 11971.
11. Goldberg, Pinelopi K. 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U. S. Automobile Industry." Econometrica, 63(4):891-951.
12. Golosov, Mikhail, and Robert E. Lucas, Jr. 2007. "Menu Costs and Phillips Curves." Journal of Political Economy, 115(2):171-99.
13. Hellwig, Christian, and Laura Veldkamp. 2009. "Knowing What Others Know: Coordination Motives in Information Acquisition. " Review of Economic Studies, 76(1):223-51.
14. Klenow, Peter J., and Oleksiy Kryvtsov. 2008. "State- Dependent or Time-Dependent Pricing: Does It Matter for Recent U. S. Infation?" Quarterly Journal of Economics, 123(3):863-904.
15. Leeper, Eric M., Christopher A. Sims, and Tao Zha. 1996. "What Does Monetary Policy Do?" Brookings Papers on Economic Activity, 1996(2):1-63.
16. Lucas, Robert E., Jr. 1972. "Expectations and the Neutrality of Money." Journal of Economic Theory, 4(2):103-24.
17. Lucas, Robert E., Jr. 1973. "Some International Evidence on Output-Infation Tradeoffs." American Economic Review, 63(3):326-34.
18. Lucas, Robert E., Jr. 1977. "Understanding Business Cycles." Carnegie-Rochester Conference Series on Public Policy, 5: 7-29.
19. Mać kowiak, Bartosz A., and Mirko Wiederholt. 2007. "Optimal Sticky Prices under Rational Inattention. " Centre for Economic Policy Research Discussion Paper 6243.
20. Mankiw, N. Gregory, and Ricardo Reis. 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve." Quarterly Journal of Economics, 117(4):1295-1328.
21. Midrigan, Virgiliu D. 2007. "Menu Costs, Multi-Product Firms, and Aggregate Fluctuations." Center for Financial Studies Working Paper 2007/13.
22. Morris, Stephen, and Hyun Song Shin. 2002. "Social Value of Public Information. " American Economic Review, 92(5):1521-34.
23. Morris, Stephen, and Hyun Song Shin. 2003. "Global Games: Theory and Applications." In Advances in Economics and Econometrics, ed. Mathias Dewatripont, Lars Peter Hansen, and Steven J. Turnovsky, 56-114. Cambridge: Cambridge University Press.
24. Nakamura, Emi, and Jón Steinsson. 2008a. "Five Facts about Prices: A Reevaluation of Menu Cost Models." Quarterly Journal of Economics, 123(4):1415-64.
25. Nakamura, Emi, and Jón Steinsson. 2008b. "Monetary Non-Neutrality in a Multi-Sector Menu Cost Model." National Bureau of Economic Research Working Paper 14001.
26. Phelps, Edmund S. 1970. "Introduction: The New Microeconomics in Employment and Infation Theory." In Microeconomic Foundations of Employment and Infation Theory, by Edmund S. Phelps, 1-23. New York: Norton.
27. Pischke, Jörn-Steffen. 1995. "Individual Income, Incomplete Information, and Aggregate Consumption. " Econometrica, 63(4):805-40.
28. Reis, Ricardo. 2006. "Inattentive Producers." Review of Economic studies, 73(3):793-821.
29. Sims, Christopher A. 1998. "Stickiness." Carnegie-Rochester Conference Series on Public Policy, 49: 317-56.
30. Sims, Christopher A. 2003. "Implications of Rational Inattention. " Journal of Monetary Economics, 50(3):665-90.
31. Sims, Christopher A. 2006. "Rational Inattention: Beyond the Linear-Quadratic Case." American Economic Review, 96(2):158-63.
32. Smets, Frank, and Raf Wouters. 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area." Journal of the European Economic Association, 1(5):1123-75.
33. Taylor, John B. 1980. "Aggregate Dynamics and Staggered Contracts." Journal of Political Economy, 88(1):1-23.
34. Townsend, Robert M. 1983. "Forecasting the Forecasts of Others." Journal of Political Economy, 91(4):546-88.
35. Uhlig, Harald. 1996. "A Law of Large Numbers for Large Economies." Economic Theory, 8(1):41-50.
36. Uhlig, Harald. 2005. "What Are the Effects of Monetary Policy on Output? Results from an Agnostic Identifcation Procedure." Journal of Monetary Economics, 52(2):381-419.
37. Woodford, Michael. 2003a. "Imperfect Common Knowledge and the Effects of Monetary Policy." In Knowledge, Information, and Expectations in Modern Macroeconomics: In Honor of Edmund s. Phelps, ed. Philippe Aghion, Roman Frydman, Joseph Stiglitz, and Michael Woodford, 25-58. Princeton, NJ: Princeton University Press.
38. Woodford, Michael. 2003b. Interest and Prices: Foundations of a Theory of Monetary Policy. Princeton, NJ: Princeton University Press.
39. Zbaracki, Mark J., Mark Ritson, Daniel Levy, Shantanu Dutta, and Mark Bergen. 2004. "Managerial and Customer Costs of Price Adjustment: Direct Evidence from Industrial Markets." Review of Economics and Statistics, 86(2):514-33.