Vagueness, credibility, and government policy
A discussion of the reasons why it may be in a government agency's--and society's--best interest to be vague about policy objectives. Using the concept of "cheap talk," the author explains that when an agency faces a trade-off between precise and credible announcements, its best move may be to provide truthful but limited information.
Volume (Year): (1995)
Issue (Month): Q I ()
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- Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
- Marvin Goodfriend, 1985.
"Monetary mystique : secrecy and central banking,"
85-07, Federal Reserve Bank of Richmond.
- Stein, Jeremy C, 1989. "Cheap Talk and the Fed: A Theory of Imprecise Policy Announcements," American Economic Review, American Economic Association, vol. 79(1), pages 32-42, March.
- Buser, Stephen A & Chen, Andrew H & Kane, Edward J, 1981. "Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital," Journal of Finance, American Finance Association, vol. 36(1), pages 51-60, March.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Kenneth Spong, 2000.
"Banking regulation : its purposes, implementation, and effects,"
Federal Reserve Bank of Kansas City, number 2000bria.
- Kenneth Spong, 1994. "Banking regulation : its purpose, implementation, and effects," Monograph, Federal Reserve Bank of Kansas City, number 1994bria.
- Matthews, Steven A. & Okuno-Fujiwara, Masahiro & Postlewaite, Andrew, 1991.
"Refining cheap-talk equilibria,"
Journal of Economic Theory,
Elsevier, vol. 55(2), pages 247-273, December.
- Kane, Edward J., 1980. "Politics and Fed policymaking : The more things change the more they remain the same," Journal of Monetary Economics, Elsevier, vol. 6(2), pages 199-211, April.
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