than its static analog. We then test the theory using monthly production targets of the Big Three U.S. auto manufacturers …

entropy cost functions that better match this feature of the data and that retain key simplifying features of the Shannon …

preferences, habits, and jumps. The metrics describe the pricing kernel's dispersion (the entropy of the title) and dynamics (time … dependence, a measure of how entropy varies over different time horizons). We show how each model generates entropy and time … approximations -- clarifies the mechanisms underlying these models. It also reveals, in some cases, tension between entropy, which …