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Government Information Transparency

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Author Info

  • Joan Esteban

    ()

  • Facundo Albornoz

    ()

  • Paolo Vanin

    ()

Abstract

This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a benevolent government may ex-post be non-informative, in an attempt to countervail the tax distortion with a "second best" compensating distortion in information. This result provides a rationale for independent national statistical offices, committed to truthful communication. We also find that whether inequality in income distribution favors or harms government transparency depends on labor supply elasticity.

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Bibliographic Info

Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 774.09.

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Length: 47
Date of creation: 14 May 2009
Date of revision: 10 Feb 2010
Handle: RePEc:aub:autbar:774.09

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Keywords: Government announcements; Cheap talk; Asymmetric in- formation; Inequality;

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References

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The case for independent statistical agencies
    by Economic Logician in Economic Logic on 2009-06-11 21:37:00

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