Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098098 | Journal of Economic Dynamics and Control | 2016 | 17 Pages |
Abstract
We study the link between asymmetries of markups and firm exit rates and asymmetries in information acquisition along the U.S. business cycle. We argue that a model of optimal firm exit under rational inattention produces lagged, counter-cyclical and positively skewed markups together with counter-cyclical exit rates, consistent with the empirical evidence. Our model also predicts counter-cyclical information rigidities consistent with survey evidence.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Anton Cheremukhin, Antonella Tutino,