Speculative Attacks with Multiple Sources of Public Information
AbstractWe propose a speculative attack model in which agents receive multiple public signals. It is characterised by its focus on an informational structure, which sets free from the strict separation between public information and private information. Diverse pieces of public information can be taken into account differently by players and are likely to lead to different appreciations ex post. This process defines players’ private value. The main result is to show that equilibrium uniqueness depends on two conditions: (i) signals are sufficiently dispersed (ii) private beliefs about the relative precision of these signals sufficiently differ. We derive some implications for information dissemination policy. Transparency in this context is multi-dimensional: it concerns the publicity of announcements, the number of signals disclosed as well as their precision. Especially, it seems that the central bank has better not publishing its forecast errors in order to maintain stability. An illustration to our analysis is the recent debate concerning the optimal monetary policy committee structure of central banks. Keywords: Speculative attack – coordination game – multiple equilibria – public and private information – transparency. JEL Classification: F31 – D82.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Financial Markets Group in its series FMG Discussion Papers with number dp570.
Date of creation: Jun 2006
Date of revision:
Contact details of provider:
Web page: http://www2.lse.ac.uk/fmg/
Other versions of this item:
- Camille Cornand & Frank Heinemann, 2009. "Speculative Attacks with Multiple Sources of Public Information," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(1), pages 73-102, 03.
- Cornand, Camille & Heinemann, Frank, 2005. "Speculative Attacks with Multiple Sources of Public Information," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 157, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-25 (All new papers)
- NEP-CBA-2006-11-25 (Central Banking)
- NEP-MON-2006-11-25 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christina E. Bannier, 2003.
"Private and Public Information in Self-Fulfilling Currency Crises,"
- Metz, Christina E., 2000. "Private and public information in self-fulfilling currency crises," Research Notes 00-7, Deutsche Bank Research.
- Hellwig, Christian, 2002. "Public Information, Private Information, and the Multiplicity of Equilibria in Coordination Games," Journal of Economic Theory, Elsevier, vol. 107(2), pages 191-222, December.
- Stephen Morris & Hyun Song Shin, 2000.
"Global Games: Theory and Applications,"
Cowles Foundation Discussion Papers
1275R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2001.
- Stephen Morris & Hyun S Shin, 2001. "Global Games: Theory and Applications," Levine's Working Paper Archive 122247000000001080, David K. Levine.
- Stephen Morris & Hyun Song Shin, 2000. "Global Games: Theory and Applications," Cowles Foundation Discussion Papers 1275, Cowles Foundation for Research in Economics, Yale University.
- Heinemann, Frank & Illing, Gerhard, 2002. "Speculative attacks: unique equilibrium and transparency," Journal of International Economics, Elsevier, vol. 58(2), pages 429-450, December.
- Obstfeld, Maurice, 1996.
"Models of Currency Crises with Self-fulfilling Features,"
CEPR Discussion Papers
1315, C.E.P.R. Discussion Papers.
- Obstfeld, Maurice, 1996. "Models of currency crises with self-fulfilling features," European Economic Review, Elsevier, vol. 40(3-5), pages 1037-1047, April.
- Maurice Obstfeld, 1997. "Models of Currency Crises with Self-Fulfilling Features," NBER Working Papers 5285, National Bureau of Economic Research, Inc.
- Morris, S & Song Shin, H, 1996.
"Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks,"
126, Economics Group, Nuffield College, University of Oxford.
- Morris, Stephen & Shin, Hyun Song, 1998. "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review, American Economic Association, vol. 88(3), pages 587-97, June.
- Morris, Stephen & Shin, Hyun Song, 1997. "Unique Equilibrium in a Model of Self-fulfilling Currency Attacks," CEPR Discussion Papers 1687, C.E.P.R. Discussion Papers.
- Jutta Dönges & Frank Heinemann, 2001. "Competition for Order Flow as a Coordination Game," Working Paper Series: Finance and Accounting 64, Department of Finance, Goethe University Frankfurt am Main.
- Obstfeld, Maurice, 1986.
"Rational and Self-fulfilling Balance-of-Payments Crises,"
American Economic Review,
American Economic Association, vol. 76(1), pages 72-81, March.
- Maurice Obstfeld, 1986. "Rational and Self-Fulfilling Balance-of-Payments Crises," NBER Working Papers 1486, National Bureau of Economic Research, Inc.
- Daniëls, Tijmen R. & Jager, Henk & Klaassen, Franc, 2011. "Currency crises with the threat of an interest rate defence," Journal of International Economics, Elsevier, vol. 85(1), pages 14-24, September.
- Jean-Pierre Allegret & Camille Cornand, 2006.
"The Pros and Cons of Higher Transparency: The Case of Speculative Attacks,"
- Jean-Pierre Allegret & Camille Cornand, 2006. "The pros and cons of higher transparency: the case of speculative attacks," Recherches économiques de Louvain, De Boeck Université, vol. 72(3), pages 215-246.
- Jean-Pierre Allegret & Camille Cornand, 2005. "The Pros and Cons of Higher Transparency: The Case of Speculative Attacks," Post-Print halshs-00180086, HAL.
- Jean-Pierre Allegret & Camille Cornand, 2005. "The Pros and Cons of Higher Transparency: The Case of Speculative Attacks," Working Papers 0502, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Jean-Pierre ALLEGRET & Camille CORNAND, 2006. "The pros and cons of higher transparency : the case of speculative attacks," Discussion Papers (REL - Recherches Economiques de Louvain) 2006031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Jean-Marc Tallon, 2006. "Incertitude stratégique et sélection d'équilibre : deux applications," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00177058, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The FMG Administration).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.