Abhatoo - Centre Nationale de Documentation

In this paper we have presented a method of solving linear rational models with imperfect and asymmetric information. General imperfect information problem even in linear framework requires solving infinite dimensional problems. Proposed asymptotic expansion method is able to deliver approximate to such problems. We have concentrated on expansion around full information case since it allows for direct comparisons with full information case and thus for assessment of influence of imperfect information on the economy. Additionally such an expansion allows for relatively easy solution. We have limited ourselves to first order terms only, but higher order expansions seems to be possible.