Implications of rational inattention
Sims's 2003 paper assumes that decisions can rely on observations only through a communication channel of limited Shannon capacity. The abstract says this limit behaves much like a signal extraction problem or an adjustment cost in standard control models, so the framework resembles familiar dynamic rational expectations models while having policy implications that differ enough to merit attention. Used in the article at abstract level, as a formal treatment of limited attention in macroeconomic decisions.
Sims's 2003 paper assumes that decisions can rely on observations only through a communication channel of limited Shannon capacity. The abstract says this limit behaves much like a signal extraction problem or an adjustment cost in standard control models, so the framework resembles familiar dynamic rational expectations models while having policy implications that differ enough to merit attention. Used in the article at abstract level, as a formal treatment of limited attention in macroeconomic decisions.
Written from the abstract, Princeton record and RePEc record, 2026-10-31.
What our sources record
Recorded when this source was checked, figures included, with page references and quotation marks removed.
Sims, C. A. (2003). “Implications of rational inattention.” Journal of Monetary Economics, 50(3), 665-690. doi:10.1016/S0304-3932(03)00029-1 https://doi.org/10.1016/S0304-3932(03)00029-1