Imperfect information in macroeconomics

Paul Hubert (1) , Giovanni Ricco (1)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

This article presents some recent theoretical and empirical contributions to the macroeconomic literature that challenge the perfect information hypo-thesis. By taking into account the information frictions encountered by economic agents, it is possible to explain some of the empirical regularities that are difficult to rationalise in the standard framework of full information rational expectations. As an example, we discuss how the sign, size and persistence of the estimated effects of monetary and fiscal policies can change when the informational frictions experienced by economic agents are taken into account.

Keywords: Infomational frictions; Imperfect information; Economic policy

Domains: Humanities and Social Sciences; Economics and Finance

Paul Hubert, Giovanni Ricco. Imperfect information in macroeconomics. Revue de l'OFCE, 2018, Whither the Economy?, 3 (157), pp.181-196. ⟨10.3917/reof.157.0181⟩. ⟨hal-03458122⟩