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Essays on Information, Coordination, and Monetary Policy / ANNE PAESS

Swansea University Author: ANNE PAESS

DOI (Published version): 10.23889/SUthesis.59496

Abstract

Greater transparency in policymaking has been a distinct trend among the world’s major central banks in the past 30 years. This trend reflects an established view in the central-banking community that managing expectations in the economy through communication is an important element of monetary polic...

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Published: Swansea 2021
Institution: Swansea University
Degree level: Doctoral
Degree name: Ph.D
Supervisor: Lawler, Phillip ; James, Jonathan
URI: https://cronfa.swan.ac.uk/Record/cronfa59496
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spelling 2022-03-04T16:05:52.2873046 v2 59496 2022-03-04 Essays on Information, Coordination, and Monetary Policy 4198dbbfb5a285e85df1ee9d20a3abc3 ANNE PAESS ANNE PAESS true false 2022-03-04 Greater transparency in policymaking has been a distinct trend among the world’s major central banks in the past 30 years. This trend reflects an established view in the central-banking community that managing expectations in the economy through communication is an important element of monetary policy. This view implies that there is an inherent connection between central bank transparency, private sector knowledge, and effectiveness of policy.The aim of this thesis is to add to the theoretical body of work by consider-ing optimal policy design in the context of a narrow set of game-theoretic models with strategic complementarities and heterogeneity in private sector information. Each model variation is defined in terms of assumptions about information qual-ity, its acquisition and dissemination. We evaluate policy performance in terms of social welfare outcomes as well as its ability to eliminate informational inefficiencies.In Chapter 2 we extend the seminal Morris and Shin (2002) model to include information stickiness in the private sector, central bank transparency, and direct policy intervention. We find that in our model (i) commitment performs at least as well as discretionary policy, and (ii) optimally designed policy fails to achieve an efficient outcome.In Chapter 3 we extend the Morris and Shin (2002) model to include costly private information acquisition, central bank transparency, and direct policy inter-vention. In an economy with a fixed information cost, the combination of full opacity and an optimally designed policy rule achieves efficiency; whereas, in an economy with a linear-cost structure, optimal policy either eliminates or at least mitigates informational inefficiencies.In Chapter 4 we extend the Morris and Shin (2018) market signal model to include costly information acquisition. We consider private and public information acquisition. We look at how information value of private sector actions enters the central banks optimal commitment strategies. E-Thesis Swansea 3 2 2021 2021-02-03 10.23889/SUthesis.59496 COLLEGE NANME COLLEGE CODE Swansea University Lawler, Phillip ; James, Jonathan Doctoral Ph.D Economic and Social Research Council; School of Management 2022-03-04T16:05:52.2873046 2022-03-04T15:15:01.2442779 Faculty of Humanities and Social Sciences School of Management ANNE PAESS 1 59496__22522__78a38c3d61f3493b9c656aa5842adbec.pdf Paess_Anne_PhD_Thesis_Final_Cronfa.pdf 2022-03-04T15:41:15.3218454 Output 6350349 application/pdf E-Thesis – open access true Copyright: The author, Anne Paess, 2021. true eng
title Essays on Information, Coordination, and Monetary Policy
spellingShingle Essays on Information, Coordination, and Monetary Policy
ANNE PAESS
title_short Essays on Information, Coordination, and Monetary Policy
title_full Essays on Information, Coordination, and Monetary Policy
title_fullStr Essays on Information, Coordination, and Monetary Policy
title_full_unstemmed Essays on Information, Coordination, and Monetary Policy
title_sort Essays on Information, Coordination, and Monetary Policy
author_id_str_mv 4198dbbfb5a285e85df1ee9d20a3abc3
author_id_fullname_str_mv 4198dbbfb5a285e85df1ee9d20a3abc3_***_ANNE PAESS
author ANNE PAESS
author2 ANNE PAESS
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publishDate 2021
institution Swansea University
doi_str_mv 10.23889/SUthesis.59496
college_str Faculty of Humanities and Social Sciences
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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
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description Greater transparency in policymaking has been a distinct trend among the world’s major central banks in the past 30 years. This trend reflects an established view in the central-banking community that managing expectations in the economy through communication is an important element of monetary policy. This view implies that there is an inherent connection between central bank transparency, private sector knowledge, and effectiveness of policy.The aim of this thesis is to add to the theoretical body of work by consider-ing optimal policy design in the context of a narrow set of game-theoretic models with strategic complementarities and heterogeneity in private sector information. Each model variation is defined in terms of assumptions about information qual-ity, its acquisition and dissemination. We evaluate policy performance in terms of social welfare outcomes as well as its ability to eliminate informational inefficiencies.In Chapter 2 we extend the seminal Morris and Shin (2002) model to include information stickiness in the private sector, central bank transparency, and direct policy intervention. We find that in our model (i) commitment performs at least as well as discretionary policy, and (ii) optimally designed policy fails to achieve an efficient outcome.In Chapter 3 we extend the Morris and Shin (2002) model to include costly private information acquisition, central bank transparency, and direct policy inter-vention. In an economy with a fixed information cost, the combination of full opacity and an optimally designed policy rule achieves efficiency; whereas, in an economy with a linear-cost structure, optimal policy either eliminates or at least mitigates informational inefficiencies.In Chapter 4 we extend the Morris and Shin (2018) market signal model to include costly information acquisition. We consider private and public information acquisition. We look at how information value of private sector actions enters the central banks optimal commitment strategies.
published_date 2021-02-03T04:16:51Z
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score 11.012678

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