The Social Value of Information: A Test of a Beauty and Non-Beauty Contest
Thomas Lustenberger and
Enzo Rossi ()
No 2017-17, Working Papers from Swiss National Bank
We develop and apply a procedure to test the welfare implications of a beauty and non-beauty contest based on survey forecasts of interest rates and yields in a large country sample over an extended period of time. In most countries, interest-rate forecasts are unbiased and consistent with both models, but are rarely supported by yield forecasts. In half of the countries, a higher precision of public information regarding interest rates increases welfare. During forward guidance, public information is less precise than private information.
Keywords: Value of information; beauty contest; interest rate forecasts; bond yield forecasts; strategic forecasts; central bank transparency; forward guidance (search for similar items in EconPapers)
JEL-codes: D8 E43 E52 E58 G1 G29 (search for similar items in EconPapers)
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Working Paper: The Social Value of Information: A Test of a Beauty and Non-Beauty Contest (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:snb:snbwpa:2017-17
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