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Shocks, learning, and persistence


Abstract: A simple model of the process of learning in a diverse economy is presented. This model produces a stylized business cycle with shocks which precipitate the learning process. All agents have the same information, which implies that this business cycle cannot be reduced by improved information flow, counter to many models of output and employment fluctuation.

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1980

Number: 50