No abstract available

I explore the interaction between financial and information frictions when firms set prices under rational inattention. Facing both aggregate monetary policy shock and idiosyncratic productivity shock, firms with binding financial constraint pay weakly more attention to aggregate shock than unconstrained firms due to strategic complementarity. Using recent survey data, I find new cross-sectional facts that are consistent with the model's predictions regarding firm's attention to different Macroeconomic variables. Generally, monetary non-neutrality is decreasing with the fraction of constrained firms. I provide quantitative calibration disciplined by new survey data to show how a rational inattention model with financial heterogeneity can explain the state-dependent effectiveness of monetary policy which is consistent with recent empirical findings. During recession, increasing fraction of constrained firms will lead to less powerful monetary stimulus, which standard rational inattention model can hardly perform.

Essays on Information Frictions in Macroeconomics

WANG, ZIJIAN
2021

Abstract

I explore the interaction between financial and information frictions when firms set prices under rational inattention. Facing both aggregate monetary policy shock and idiosyncratic productivity shock, firms with binding financial constraint pay weakly more attention to aggregate shock than unconstrained firms due to strategic complementarity. Using recent survey data, I find new cross-sectional facts that are consistent with the model's predictions regarding firm's attention to different Macroeconomic variables. Generally, monetary non-neutrality is decreasing with the fraction of constrained firms. I provide quantitative calibration disciplined by new survey data to show how a rational inattention model with financial heterogeneity can explain the state-dependent effectiveness of monetary policy which is consistent with recent empirical findings. During recession, increasing fraction of constrained firms will lead to less powerful monetary stimulus, which standard rational inattention model can hardly perform.
1-feb-2021
Inglese
31
2018/2019
ECONOMICS AND FINANCE
Settore SECS-P/06 - Economia Applicata
SERGEYEV, DMYTRO
IOVINO, LUIGI
File in questo prodotto:
File Dimensione Formato  
Zijian_Wang TESI vf.pdf

accesso aperto

Descrizione: WANG_ZIJAN_Tesi_VF
Tipologia: Tesi di dottorato
Dimensione 1.61 MB
Formato Adobe PDF
1.61 MB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4035703
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact