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- Title
The Effects of Permanent and Transitory Shocks under Imperfect Information.
- Authors
Foerster, Andrew; Sarte, Pierre-Daniel
- Abstract
The article explores the implications of imperfect information on household behavior using the one-sector neoclassical growth model with permanent and temporary shocks to productivity growth. Topics covered include the solution for solving the model in households that cannot distinguish between permanent and transitory shocks in real time, the calculation for determining the stability of the model's dynamics, and the response of real variables to errors made in forecasting these shocks.
- Subjects
RANDOM walks; BUSINESS cycles; INDUSTRIAL productivity; FEDERAL Reserve banks
- Publication
Economic Quarterly (10697225), 2020, Vol 106, Issue 2, p41
- ISSN
1069-7225
- Publication type
Article
- DOI
10.21144/eq1060201