We review the recent literature on rational inattention, identify the main theoretical
mechanisms, and explain how it helps us understand a variety of phenomena across fields …

We model the decisions of a multiproduct firm that faces a fixed “menu” cost: once it is paid,
the firm can adjust the price of all its products. We characterize analytically the steady state …

Using a survey of French manufacturing firms, we study how firms' expectations and actions
are affected by both aggregate and industry-specific conditions. In response to industry-level …

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 …

This paper studies how competition affects firms' expectations in a new dynamic general
equilibrium model with rational inattention and oligopolistic competition where firms acquire …

The muted volatility of inflation during the Great Recession and its aftermath has refocused
attention on the constraints that firms face when adjusting prices. Using new empirical and …

Abstract Information frictions prevent importers from observing the price of a good in every
market. In this paper, we seek to explain how the presence of such frictions shapes the flow …

We develop a multisector sticky-price DSGE model that can endogenously deliver
differential responses of prices to aggregate and sectoral shocks. Input-output production …

We identify many major US corporations that are highly exposed to inflation risk. Yet,
although the SEC legally requires disclosing possible risk factors, more than 61% of the …

This paper studies the social value of information about the future. In a stylized OLG model,
agents need to forecast the future price level, they observe the current price and perceive …