Speculative Attacks and Informational Structure: an Experimental Study

Camille Cornand

Review of International Economics, 2006, vol. 14, issue 5, 797-817

Abstract: This paper addresses the question of whether public information destabilizes the economy in the context of signals of a different nature. We present an experimental evaluation of the speculative attack game of Morris and Shin (1998). Our objective is two‐fold: to evaluate whether public information destabilizes the economy within a context of signals of different nature and to enlarge upon the results of Heinemann, Nagel, and Ockenfels (2004) (HNO). Our evidence suggests that in sessions with both private and common signals, the fact that the common signal plays a focal role enhances the central bank’s welfare: it reduces the probability of crisis and increases its predictability. Therefore, we raise doubts about the policy implications of HNO’s findings. The new policy lesson is that the central bank has more control over the beliefs of traders if it discloses one clear signal when agents also get private information from other sources.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
https://doi.org/10.1111/j.1467-9396.2006.00608.x

Related works:
Working Paper: Speculative Attacks and Informational Structure: an Experimental Study (2008)
Working Paper: Speculative Attack and Informational Structure: an Experimental Study (2006)
Working Paper: Speculative Attack and Informational Structure: An Experimental Study (2004)
Working Paper: Speculative Attack and Informational Structure: An Experimental Study (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:14:y:2006:i:5:p:797-817

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().