We develop a fast, tractable, and robust method for solving the transition path of dynamic rational inattention problems in linear-quadratic-Gaussian settings. As an application of our general framework, we develop an attention-driven theory of dynamic pricing in which the Phillips curve slope...

We develop a tractable and portable method for characterizing the solution to dynamic multivariate rational inattention models in linear quadratic Gaussian settings. We apply our framework to propose an attention driven theory of the Phillips curve, the slope of which is endogenous to how...

We study a general class of consumption-savings problems with recursive preferences. We characterize the sign of the consumption response to arbitrary shocks in terms of the product of two sufficient statistics: the elasticity of intertemporal substitution between contemporaneous consumption and...

We document that attention to macroeconomic conditions is counter-cyclical using a natural-language-processing method that analyzes US public firms' regulatory filings. We rationalize this phenomenon as an optimal stochastic choice pattern in response to higher stakes for tracking macroeconomic...

Policymakers can choose from a variety of fiscal stimulus levers: conditional transfers, unconditional transfers, or direct purchases from certain industries. This choice is complicated by the rich network structures that connect households and industries via employment, directed consumption,...

Affirmative action policies often take two forms: quotas, where a certain number of individuals from underrepresented minority groups are to be admitted; and priority subsidies, where these individuals are given higher admissions scores relative to some baseline. Should a policymaker concerned...

To study the equilibrium implications of strategic misoptimization, we introduce a model of costly control in continuum-player games. We find primitive conditions for binary-action and continuous-action games such that equilibria exist, are unique, are efficient, and feature monotone comparative...

We study a screening model in which agents can under-utilize goods. We characterize implementable and optimal contracts and show that, whenever the principal values usage instrumentally, the optimal menu involves multi-part tariffs with tiers of zero marginal prices. We apply our results to...

Advanced economies feature complicated networks that connect households, firms, and regions. How do these structures affect the impact of fiscal policy and its optimal targeting? We study these questions in a model with input-output linkages, regional structure, and household heterogeneity in...