Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5061928 | Economics Letters | 2008 | 4 Pages |
Abstract
The consequences of private information concerning the realization of aggregate demand shocks are investigated in the context of a standard macroeconomic model. It is found that an improvement in information quality can be damaging, in the sense of amplifying employment fluctuations. The source of this result is an externality arising from individual firm wage decisions, which leads to a collective over-reaction to private information.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jonathan G. James, Phillip Lawler,