Speculative Attack and Informational Structure: An Experimental Study
AbstractThis paper addresses the question whether public information destabilises the economy in the context of signals of different nature. We present an experiment on the speculative attack game of Morris and Shin (1998). Our objective is double: (i) evaluating whether public information destabilises the economy in a context of signals of different nature; and (ii) enlarging the results of Heinemann, Nagel and Ockenfels (2002). Our evidence suggests that in sessions with both private and common signals, the fact that the public signal plays a focal role enhances the central bank’s welfare: it reduces the probability of crisis and increases its predictability. In terms of economic policy, the central bank has more control on the beliefs of traders if it discloses one clear signal when agents also get private information from other sources.
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Bibliographic InfoPaper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 0407.
Length: 19 pages
Date of creation: Jan 2004
Date of revision:
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Speculative attacks; Private information; Public Information;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
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- Cornand, Camille & Heinemann, Frank, 2006.
"Optimal Degree of Public Information Dissemination,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
158, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Camille Cornand & Frank Heinemann, 2008. "Optimal Degree of Public Information Dissemination," Economic Journal, Royal Economic Society, vol. 118(528), pages 718-742, 04.
- Camille Cornand & Frank Heinemann, 2004. "Optimal Degree of Public Information Dissemination," CESifo Working Paper Series 1353, CESifo Group Munich.
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