Dynamic Rational Inattention and the Phillips Curve

Rational inattention in dynamic adverse selection

I analyze a market with asymmetric information, interdependent values, multiple trading opportunities and trade frictions. The frictions can be reduced at a cost, e.g. by increasing attention, search or computing power. Raising the difference between the values of buyers and sellers can delay trade, despite the greater gains from trade. Rejecting an initial offer is a stronger signal when the o...

The Wage Curve and the Phillips Curve

Blanchflower and Oswald (1994) have argued that, in regional data, the level of unemployment is related to the fevel of wages. This result is at variance with an application of the original Phillips curve to regional data, which would predict that the change in wages ought to be related to the unemployment rate. On the other hand, there is considerable empirical support for the expectations-aug...

The Phillips Curve

Sectoral Phillips curves and the aggregate Phillips curve

Sector-level Phillips curves are estimated in French data. There is considerable heterogeneity across sectors, with vastly different estimates of the backward looking component of inflation and the duration of nominal rigidities. A multi-sector model of inflation dynamics is calibrated on the basis of these sectoral estimates. Aggregate inflation, simulated on the basis of heterogeneous sectors...

The Phillips curve in Thailand¤

The subject of this paper is the estimation of the Phillips curve in Thailand. The aim of the estimation is to ...t the Phillips curve as part of a small-scale, log-linearised structural model for the country, which is suitable to form the basis for a future simulation exercise to ...nd an optimum monetary policy rule. A linear form of the Phillips curve is estimated using ordinary least square...