Details

Autor(en) / Beteiligte

• Baley, Isaac
• Blanco, Andrés

Titel

Firm Uncertainty Cycles and the Propagation of Nominal Shocks

Ist Teil von

• American economic journal. Macroeconomics, 2019-01, Vol.11 (1), p.276-337

Ort / Verlag

Pittsburgh: American Economic Association

Erscheinungsjahr

2019

Link zum Volltext

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• We develop a framework to study the impact of idiosyncratic uncertainty on aggregate economic outcomes. Agents learn about individual characteristics, which receive infrequent, large, and persistent shocks. In this environment, idiosyncratic uncertainty moves in cycles, fluctuating between periods of high and low uncertainty; with additional fixed adjustment costs, the frequency and size of agents’ actions also fluctuate in cycles. We apply our framework to study pricing behavior and the propagation of nominal shocks. We show, analytically and quantitatively, that idiosyncratic uncertainty cycles amplify the real effects of nominal shocks by generating cross-sectional dispersion in firms’ adjustment frequency and in learning speed.