Real Rigidity, Nominal Rigidity, and the Social Value of Information
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Angeletos_Real rigidity.pdf
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599.49 KB
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Author(s)
Iovino, Luigi
La'O, Jennifer
Angeletos, George M
Date Issued
January 2016
Journal
American Economic Review
Publisher
American Economic Association
Citation
Angeletos, George-Marios, Luigi Iovino, and Jennifer La’O. “ Real Rigidity, Nominal Rigidity, and the Social Value of Information † .” American Economic Review 106, no. 01 (January 2016): 200–227.
Version
Final published version
Abstract
Does welfare improve when firms are better informed about the state of the economy and can thus better coordinate their production and pricing decisions? We address this question in an elementary business-cycle model that highlights how the dispersion of information can impede both kinds of decisions and, in this sense, be the source of both real and nominal rigidity. Within this context we develop a taxonomy for how the social value of information depends on the two rigidities, on the sources of the business cycle, and on the conduct of monetary policy. (JEL D21, D82, D83, E32, E52)
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.20110865
