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The transcript of a panel discussion marking the fiftieth anniversary of John Muth's "Rational Expectations and the … Theory of Price Movements" (Econometrica 1961). The panel consists of Michael Lovell, Robert Lucas, Dale Mortensen, Robert … of issues related to the rational-expectations hypothesis, including: its history, starting with Muth's work at Carnegie …
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her expectations and the dynamics of the macroeconomy. Paying attention to demand shocks lowers output volatility and …
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We show what the rational inattention model predicts about the treatment effect of information provided during a randomized control trial. This is a non-trivial question because the model implies optimal attention choice before, during, and after an information treatment. The predictions of the...
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