IDEAS home Printed from https://ideas.repec.org/a/bla/jfinan/v70y2015i6p2777-2812.html
   My bibliography  Save this article

Government Intervention and Information Aggregation by Prices

Author

Listed:
  • PHILIP BOND
  • ITAY GOLDSTEIN

Abstract

Governments intervene in firms' lives in a variety of ways. To enhance the efficiency of government intervention, many researchers and policy makers call for governments to make use of information contained in stock market prices. However, price informativeness is endogenous to government policy. We analyze government policy in light of this endogeneity. In some cases, it is optimal for a government to commit to limit its reliance on market prices to avoid harming the aggregation of information into market prices. For similar reasons, it is optimal for a government to limit transparency in some dimensions.

Suggested Citation

  • Philip Bond & Itay Goldstein, 2015. "Government Intervention and Information Aggregation by Prices," Journal of Finance, American Finance Association, vol. 70(6), pages 2777-2812, December.
  • Handle: RePEc:bla:jfinan:v:70:y:2015:i:6:p:2777-2812
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jofi.12303
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Romain Baeriswyl & Camille Cornand & Bruno Ziliotto, 2016. "Observing and shaping the market: the dilemma of central banks," Working Papers 1623, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. repec:eee:finsta:v:37:y:2018:i:c:p:49-59 is not listed on IDEAS
    3. repec:eee:jfinec:v:131:y:2019:i:1:p:118-138 is not listed on IDEAS
    4. repec:eee:jetheo:v:175:y:2018:i:c:p:447-490 is not listed on IDEAS
    5. Elchanan Ben-Porath & Eddie Dekel & Barton L Lipman, 2018. "Disclosure and Choice," Review of Economic Studies, Oxford University Press, vol. 85(3), pages 1471-1501.
    6. Braz Camargo & Kyungmin Kim & Benjamin Lester, 2016. "Information Spillovers, Gains from Trade, and Interventions in Frozen Markets," Review of Financial Studies, Society for Financial Studies, vol. 29(5), pages 1291-1329.
    7. repec:eee:jetheo:v:177:y:2018:i:c:p:34-69 is not listed on IDEAS
    8. Raphael Boleslavsky & Christopher Hennessy & David L. Kelly, 2017. "Markets vs. Mechanisms," Working Papers 2017-11, University of Miami, Department of Economics.
    9. Boleslavsky, Raphael & Kelly, David L. & Taylor, Curtis R., 2017. "Selloffs, bailouts, and feedback: Can asset markets inform policy?," Journal of Economic Theory, Elsevier, vol. 169(C), pages 294-343.
    10. repec:eee:jfinec:v:131:y:2019:i:2:p:251-268 is not listed on IDEAS
    11. Piccolo, Alessio & Shapiro, Joel, 2017. "Credit Ratings and Market Information," CEPR Discussion Papers 11961, C.E.P.R. Discussion Papers.
    12. repec:spr:joecth:v:66:y:2018:i:4:d:10.1007_s00199-017-1081-9 is not listed on IDEAS
    13. repec:eee:jetheo:v:179:y:2019:i:c:p:240-274 is not listed on IDEAS
    14. Antonio Falato & Diana A. Iercosan & Filip Zikes, 2019. "Banks as Regulated Traders," Finance and Economics Discussion Series 2019-005, Board of Governors of the Federal Reserve System (US).
    15. repec:eee:finmar:v:44:y:2019:i:c:p:42-70 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jfinan:v:70:y:2015:i:6:p:2777-2812. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://edirc.repec.org/data/afaaaea.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.