Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278659 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2827
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We solve a real business cycle model with rational inattention (an RI-RBC model). In the RI-RBC model, the growth rates of employment, investment, and output are about as persistent as in the data, with an amount of inattention consistent with survey data on expectations. Moreover, consumption, employment, and output move in the same direction in response to news about future productivity. By contrast, the baseline RBC model produces neither persistent growth rates nor business cycle comovement after news shocks.
Subjects: 
information choice
rational inattention
real business cycle model
productivity shocks
news shocks
JEL: 
D83
E32
E71
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6112-7
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.