In this paper we provide a vacancyindex for Chile for the period 1986 to the second quarter of 2002. This index is calculated using the number of jobs offered in newspapers’ advertisements of the 5 main urban areas. This information, in addition with employment and labor force data, is used to...

An informational role of policy arises in economies where large fluctuations are triggered by selffulfilling expectation switches between efficient "optimism" and inefficient "pessimism," a feature that is common in many dynamic economies with coordination failures. Policy affects the...

How should policy be optimally designed when a monetary authority faces a private sector that is skeptical about policy announcements and makes inferences about the monetary authority’s ability to follow through on policy plans from economic data? To provide an answer to this question, we...

I augment the rational inattention model of price-setting (in which firms have a limited capacity to process information) to allow firms to produce multiple goods. My main contribution is to highlight the economies of scale in the use of information that arise in this context, which firms...

Could prudential policies backfire by making the lack of commitment problem of bailouts worse? This commitment problem refers to the excessive risk taken by banks and financial institutions in expectations of bailouts if crises occur, which in turn increase financial fragility and the severity...

We study the transmission of monetary policy shocks in a model in which realistic heterogeneity in price rigidity interacts with heterogeneity in sectoral size and input-output linkages, and derive conditions under which these heterogeneities generate large real effects. Empirically,...

Cross-sectional variation in micro data can be used to empirically evaluate sufficient statistics for the response of aggregate variables to policy shocks of interest. We demonstrate an easy-to-use approach through a detailed example. We evaluate the sufficiency of micro pricing moments for the...

This paper evaluates the informativeness of eight micro pricing moments for monetary non-neutrality. Frequency of price changes is the only robustly informative moment. The ratio of kurtosis over frequency is significant only because of frequency, and insignificant when non-pricing moments are...

Big G typically refers to aggregate government spending on a homogeneous good. In this paper, we open up this construct by analyzing the entire universe of procurement contracts of the US government and establish five facts. First, government spending is granular, that is, it is concentrated in...