We enrich a baseline RBC model with search and matching frictions on the labor
market and real frictions that are helpful in accounting for the response of macroeconomic
aggregates to shocks. The analysis allows shocks to have an unanticipated and a news (i.e.
anticipated) component. The Bayesian estimation of the model reveals that the model
which includes news shocks on macroeconomic aggregates produces a remarkable fit of the
data. News shocks in stationary and non-stationary TFP, investment-specific productivity
and preference shocks significantly affect labor market variables and explain a sizeable
fraction of macroeconomic
uctuations at medium- and long-run horizons. Historically,
news shocks have played a relevant role for output, but they have had a limited in
uence
on unemployment