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...

This paper studies optimal monetary policy under rational inattention: the policy maker optimally chooses her information subject to a processing constraint. Our analytical results emphasize how the policy maker’s information choices shape her expectations and the dynamics of the macroeconomy....

This paper studies how people make inference about a state of the world when the information structure includes additional, payoff-irrelevant states. For example, learning about effort from observed performance may require accounting for the otherwise irrelevant role of luck. This creates an...