American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Optimal Policy Intervention and the Social Value of Public Information
American Economic Review
vol. 101,
no. 4, June 2011
(pp. 1561–74)
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)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.101.4.1561Additional Materials
JEL Classification
- D82 Asymmetric and Private Information
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- E52 Monetary Policy
- E58 Central Banks and Their Policies