I construct a quantitative equilibrium model in which price-setting agents have imperfect information about the state of the economy. The model is used to ask whether monetary shocks can generate persistent movements in output. In the model agents obtain information from two sources: costly...

We document that international transactions for narrowly defined goods occur infrequently. We study the implications of this lumpiness of international trade for the response of prices and quantities during large devaluations. Using a calibrated inventory management model of international trade...