An informational rationale for action over disclosure

Alexandre N. Kohlhas

Journal of Economic Theory, 2020, vol. 187, issue C

Abstract: The past two decades have seen a considerable increase in the amount of public information provided by policymakers. Are such disclosures desirable? Or is it instead preferable to use such information to condition a policy instrument, such a tax or an interest rate? This paper studies the relative merits of each means to use a policymaker’s information in a flexible class of economies that feature dispersed information, and payoff and learning externalities. I provide conditions for when the exclusive use of a policy instrument or disclosure is optimal. I then relate these to differences in the equilibrium and socially optimal use of information. I conclude with a series of applications that show how my results apply to common beauty-contest models, competitive economies, and a broad class of macroeconomic models, among others.

Keywords: Public information; Optimal policy (search for similar items in EconPapers)
JEL-codes: D82 D83 E52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:187:y:2020:i:c:s0022053120300284

DOI: 10.1016/j.jet.2020.105023

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