Information Rigidity and the Expectations Formation Process: A Simple Framework and New Facts


We propose a new approach to test the full-information rational expectations hypothesis which can identify whether rejections of the null arise from information rigidities. This approach quantifies the economic significance of departures from the null and the underlying degree of information rigidity. Applying this approach to U.S. and... READ MORE...

Publication date: December 2012
ISBN 9781475519242

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Publication date: December 2012