Price-Level Determination Under Dispersed Information And Monetary Policy
AbstractThis paper considers the determination of aggregate price level under dispersed information. Central Bank sets policy in response to its noisy measure of the price level, and each agent makes its decisions by observing a subset of data. Information revealed to the agents and Bank is determined endogenously. It is shown that the aggregate state of the economy is not revealed perfectly to anybody but this economy behaves as if it is a representative-agent economy in which the representative agent has perfect information while the Bank has partial information. The Bank has information set affects fluctuations in the price level through its effect on policy.
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Bibliographic InfoArticle provided by Japanese Economic Association in its journal Japanese Economic Review.
Volume (Year): 57 (2006)
Issue (Month): 3 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1352-4739
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Other versions of this item:
- Aoki, Kosuke, 2006. "Price-Level Determination Under Dispersed Information and Monetary Policy," CEPR Discussion Papers 5570, C.E.P.R. Discussion Papers.
- 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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