Speculative Attack and Informational Structure: an Experimental Study

Camille Cornand

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Abstract: This paper addresses the question of whether public information destabilises the economy in the context of signals of different nature. We present an experimental evaluation of the speculative attack game of Morris and Shin (1998). Our objective is twofold: to evaluate whether public information destabilises 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.

Keywords: speculative attacks; private information; public information (search for similar items in EconPapers)
Date: 2006
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00360088
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Citations: View citations in EconPapers (21)

Published in Review of International Economics, 2006, 14 (5), pp. 797-817

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Related works:
Working Paper: Speculative Attacks and Informational Structure: an Experimental Study (2008)
Journal Article: Speculative Attacks 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)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00360088

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