News and aggregate demand shocks

Guido Lorenzoni*

*Corresponding author for this work

Research output: Contribution to journalReview article

11 Scopus citations

Abstract

In this review, I look at the recent literature on news as a source of economic fluctuations. The main question in this literature is: how does the aggregate economy respond to a shock that raises consumers' and firms' expectations about future productivity growth? I discuss how different papers have addressed this question, emphasizing the mechanisms at work under different specifications of preferences and technology, under different assumptions about nominal and real rigidities, and under different assumptions about the agents' information structure. I also briefly discuss some challenges faced by the empirical literature on the topic.

Original languageEnglish (US)
Pages (from-to)537-557
Number of pages21
JournalAnnual Review of Economics
Volume3
DOIs
StatePublished - Aug 22 2011

Keywords

  • Business cycles
  • Expectations

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'News and aggregate demand shocks'. Together they form a unique fingerprint.

  • Cite this