Optimal Policy Intervention and the Social Value of Public Information
AbstractSvensson (2006) argues that Morris and Shin (2002) is, contrary to what is claimed, pro-transparency. This paper reexamines the issue but with an important modification to the original Morris and Shin framework. Recognizing that central banks impact the economy not only indirectly via public announcements, but also directly through policy actions, we consider the social value of public information in the presence of active policy intervention. Our results strengthen Morris and Shin's conclusions considerably: in particular, we find that public disclosure of the central bank's information is unambiguously, i.e., regardless of parameter values, undesirable. (JEL D82, D83, E52, E58)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 101 (2011)
Issue (Month): 4 (June)
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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- George-Marios Angeletos & Luigi Iovino & Jennifer La'O, 2011.
"Cycles, Gaps, and the Social Value of Information,"
Levine's Working Paper Archive
786969000000000293, David K. Levine.
- Juan David Prada-Sarmiento, 2011.
"Multiple policymakers and the social value of public information,"
BORRADORES DE ECONOMIA
008981, BANCO DE LA REPÚBLICA.
- Juan David Prada-Sarmiento, . "Multiple policymakers and the social value of public information," Borradores de Economia 670, Banco de la Republica de Colombia.
- James, Jonathan G. & Lawler, Phillip, 2012. "Heterogeneous information quality; strategic complementarities and optimal policy design," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 342-352.
- Cheick Kader M'baye, 2012. "Inflation Targeting under Heterogeneous Information and Sticky Prices," Working Papers 1202, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
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