• Table of Contents
    • Abstract
    • Keywords
    • Article
      • A canonical framework
      • Common information
      • Heterogeneous beliefs, but independent strategies
      • Heterogeneous beliefs and complementary strategies
      • The role of public information
      • Looking ahead
    • See Also
    • Bibliography
    • How to cite this article

monetary business cycles (imperfect information)

Christian Hellwig
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

Business cycle theories based on incomplete information start from the premise that key economic decisions on pricing, investment or production are often made on the basis of incomplete knowledge of constantly changing aggregate economic conditions. As a result, decisions tend to respond slowly to changes in economic fundamentals, and small or temporary economic shocks may have large and long-lasting effects on macroeconomic aggregates. This article provides an introductory overview of incomplete information-based theories of business cycles, from their origins to the most recent theoretical developments.
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Keywords

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Article

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How to cite this article

Hellwig, Christian. "monetary business cycles (imperfect information)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 16 April 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_M000375> doi:10.1057/9780230226203.1119

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