Asymmetric Information and Macroeconomic Dynamics
Physica A, Vol. 389, pp. 3565-3571, 2010
Posted: 21 Mar 2011
Date Written: May 6, 2010
We show how macroeconomic dynamics can be derived from asymmetric information. As an illustration of the utility of this approach we derive the equilibrium density, non-equilibrium densities and the equation of motion for the response to a demand shock for productivity in a simple economy. Novel consequences of this approach include a natural incorporation of time dependence into macroeconomics and a common information theoretic basis for economics and other fields seeking to link micro-dynamics and macro-observables.
Keywords: Macroeconomics, Asymmetric Information, Fisher Information, Productivity
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