We consider a class of convex, competitive, neoclassical economies in which agents are rational; the equilibrium is unique; there is no room for randomization devices; and there are no shocks to preferences, technologies, endowments, or other fundamentals. In short, we rule out every known source...

We study optimal monetary policy in an environment in which firms' pricing and production decisions are subject to informational frictions. Our framework accommodates multiple formalizations of these frictions, including dispersed private information, sticky information, and certain forms of...

What are the welfare effects of the information contained in macroeconomic statistics, central-bank communications, or news in the media? We address this question in a business-cycle framework that nests the neoclassical core of modern DSGE models. Earlier lessons that were based on "beauty...

This paper studies the effect of incomplete information within a banking network. Banks are arranged in a network of claims. Claims are held either by other banks in the network or outside depositors. Within this framework, we analyze how incomplete information about the viability of bank assets...

I study an economy in which firms are interconnected and there is strategic complementarity in production decisions. Firms use the output of other firms as inputs to their own production. Furthermore, they make production choices before knowing the demand they face. The simultaneity of these...

We study how the heterogeneity of information impacts the efficiency of the business cycle and the design of optimal fiscal and monetary policy. We do so within a model that features a standard Dixit-Stiglitz demand structure, introduces dispersed private information about the underlying...

the potential heterogeneity in priors.