The sticky information approach suggests that the origin of the pervasive slow adjustment in the data may be different from the sources highlighted in the New Keynesian literature.
In the latest projections, participants’ estimates for the longer-run normal rate of unemployment had a range of 5 to 6 percent – well below the current unemployment rate of 9.1 percent and hence underscoring the degree to which the economy remains quite far from its balancedgrowth path.