Replication data for: Optimal Sticky Prices under Rational Inattention

Principal Investigator(s):  View help for Principal Investigator(s) Bartosz Mackowiak; Mirko Wiederholt

Version:  View help for Version V1

Name File Type Size Last Modified
LICENSE.txt text/plain 14.6 KB 10/12/2019 05:35:AM
ReadMe.txt text/plain 1.6 KB 10/12/2019 05:35:AM
bartoszmirko_dec04_fixedpoint2.m text/x-fortran 2 KB 10/12/2019 05:35:AM
bartoszmirko_jan05_searchforsignals_a.m text/plain 104 bytes 10/12/2019 05:35:AM
bartoszmirko_july04_IIDsignals_d.m text/plain 209 bytes 10/12/2019 05:35:AM
bartoszmirko_july04_infoflow_integral.m text/plain 366 bytes 10/12/2019 05:35:AM
optimal_sticky_prices.m text/x-fortran 10.8 KB 10/12/2019 05:35:AM

Project Citation: 

Mackowiak, Bartosz, and Wiederholt, Mirko. Replication data for: Optimal Sticky Prices under Rational Inattention. Nashville, TN: American Economic Association [publisher], 2009. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113305V1

Project Description

Summary:  View help for Summary This paper presents a model in which price setting firms decide what to pay attention to, subject to a constraint on information flow. When idiosyncratic conditions are more variable or more important than aggregate conditions, firms pay more attention to idiosyncratic conditions than to aggregate conditions. When we calibrate the model to match the large average absolute size of price changes observed in micro data, prices react fast and by large amounts to idiosyncratic shocks, but only slowly and by small amounts to nominal shocks. Nominal shocks have strong and persistent real effects. (JEL D21, D83, E31, E52)

Scope of Project

JEL Classification:  View help for JEL Classification
      D21 Firm Behavior: Theory
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      E31 Price Level; Inflation; Deflation
      E52 Monetary Policy


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V1 [2019-10-12]

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