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Journal article 1366 views 192 downloads

Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness

Jonathan James Orcid Logo, Phillip Lawler

The Manchester School, Volume: 85, Issue: 5

Swansea University Author: Jonathan James Orcid Logo

DOI (Published version): 10.1111/manc.12161

Abstract

A model economy subject to an aggregate demand disturbance and consisting of firms which are heterogeneously informed about that disturbance is considered, in order to investigate the policy implications of a monetary policymaker disclosing to firms collectively its own imperfect information about t...

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Published in: The Manchester School
Published: 2016
URI: https://cronfa.swan.ac.uk/Record/cronfa29211
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first_indexed 2016-07-13T18:17:31Z
last_indexed 2020-10-16T02:40:01Z
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spelling 2020-10-15T12:25:16.1609851 v2 29211 2016-07-13 Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness fa7a8513c107fea35bc95e4370216ed3 0000-0001-8947-7857 Jonathan James Jonathan James true false 2016-07-13 ECON A model economy subject to an aggregate demand disturbance and consisting of firms which are heterogeneously informed about that disturbance is considered, in order to investigate the policy implications of a monetary policymaker disclosing to firms collectively its own imperfect information about the state of aggregate demand. In the spirit of 'sticky information' models, not all firms respond promptly to the latest available information when making pricing decisions. With the policymaker able to adjust a monetary instrument to combat the aggregate demand shock, it is found that it cannot ever be optimal for the policymaker to disclose fully its own information. The paper proceeds to identify the circumstances which imply partial disclosure of this information would be optimal. Journal Article The Manchester School 85 5 strategic complementarity; public disclosure; policy intervention 31 12 2016 2016-12-31 10.1111/manc.12161 COLLEGE NANME Economics COLLEGE CODE ECON Swansea University 2020-10-15T12:25:16.1609851 2016-07-13T15:37:15.7512294 Faculty of Humanities and Social Sciences School of Management Jonathan James 0000-0001-8947-7857 1 Phillip Lawler 2 0029211-713201634605PM.pdf JamesLawler(MSH-2015-0017)January2016.pdf 2016-07-13T15:46:05.4530000 Output 587921 application/pdf Accepted Manuscript true 2018-06-29T00:00:00.0000000 true
title Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
spellingShingle Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
Jonathan James
title_short Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
title_full Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
title_fullStr Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
title_full_unstemmed Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
title_sort Optimal Transparency and Policy Intervention with Heterogeneous Signals and Information Stickiness
author_id_str_mv fa7a8513c107fea35bc95e4370216ed3
author_id_fullname_str_mv fa7a8513c107fea35bc95e4370216ed3_***_Jonathan James
author Jonathan James
author2 Jonathan James
Phillip Lawler
format Journal article
container_title The Manchester School
container_volume 85
container_issue 5
publishDate 2016
institution Swansea University
doi_str_mv 10.1111/manc.12161
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management
document_store_str 1
active_str 0
description A model economy subject to an aggregate demand disturbance and consisting of firms which are heterogeneously informed about that disturbance is considered, in order to investigate the policy implications of a monetary policymaker disclosing to firms collectively its own imperfect information about the state of aggregate demand. In the spirit of 'sticky information' models, not all firms respond promptly to the latest available information when making pricing decisions. With the policymaker able to adjust a monetary instrument to combat the aggregate demand shock, it is found that it cannot ever be optimal for the policymaker to disclose fully its own information. The paper proceeds to identify the circumstances which imply partial disclosure of this information would be optimal.
published_date 2016-12-31T03:35:36Z
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score 11.035349

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