We study equilibrium determination in an environment where two kinds of agents have different information sets: The fully informed agents know the structure of the model and observe histories of all exogenous and endogenous variables. The less informed agents observe only a strict subset of the...

The literature on central banking so far has provided explanations of why we observe independent central banks and why central banks are usually more conservative than governments. However, little is known about the interaction between the two institutions. Bridging the gap, we focus on the...

In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting...

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...