AbstractThe information entropy budget and the rate of information transfer between variables is studied in the context of a nonlinear reduced‐order atmospheric model. The key ingredients of the dynamics are present in this model; namely, the baroclinic instability, the instability related to the presence of an orography, the dissipation related to the surface friction, and the large‐scale meridional imbalance of energy. For the parameters chosen, the solutions of this system display a chaotic dynamics reminiscent of the large‐scale atmospheric dynamics in the extratropics. The detailed information entropy budget analysis of this system reveals that the linear rotation terms play a minor role in the generation of uncertainties compared with the orography and the surface friction. Additionally, the dominant contribution comes from the nonlinear advection terms, and their decomposition in synergetic (covariability) and single (impact of each single variable on the target one) components reveals that for some variables the covariability dominates the information transfer. The estimation of the rate of information transfer based on time series is also discussed, and an extension of the Liang's approach to nonlinear observables is proposed.