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American Economic Review: Vol. 101 No. 4 (June 2011)
AER Volume. 101, Issue 4 | 
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Optimal Policy Intervention and the Social Value of Public Information
Article Citation
James, Jonathan G., and
Phillip Lawler. 2011. "Optimal Policy Intervention and the Social Value of Public Information."
American Economic Review,
101(4): 1561-74.
DOI: 10.1257/aer.101.4.1561
DOI: 10.1257/aer.101.4.1561
Abstract
Svensson (2006) argues that Morris and Shin (2002) is, contrary to what is claimed, pro-transparency. This paper reexamines the issue but with an important modification to the original Morris and Shin framework. Recognizing that central banks impact the economy not only indirectly via public announcements, but also directly through policy actions, we consider the social value of public information in the presence of active policy intervention. Our results strengthen Morris and Shin's conclusions considerably: in particular, we find that public disclosure of the central bank's information is unambiguously, i.e., regardless of parameter values, undesirable. (JEL D82, D83, E52, E58)
Article Full-Text Access
Full-text Article
Additional Materials
Online Appendix (93.62 KB)
Authors
James, Jonathan G. (Swansea U)
Lawler, Phillip (Swansea U)
Lawler, Phillip (Swansea U)
JEL Classifications
D82: Asymmetric and Private Information
D83: Search; Learning; Information and Knowledge; Communication; Belief
E52: Monetary Policy
E58: Central Banks and Their Policies
D83: Search; Learning; Information and Knowledge; Communication; Belief
E52: Monetary Policy
E58: Central Banks and Their Policies
