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Government Information Transparency

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Author Info

  • Facundo Albornoz
  • Joan Esteban
  • Paolo Vanin

Abstract

This paper studies a model of announcements by a privately in- formed 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 re- sult 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 trans- parency depends on labor supply elasticity.

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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/09-03.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 09-03.

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Length: 47 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:bir:birmec:09-03

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Related research

Keywords: Government announcements; Cheap talk; Asymmetric information; Inequality;

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References

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Citations

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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