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An informal rationale for action over disclosure
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
2020 (English)In: Journal of Economic Theory, ISSN 0022-0531, E-ISSN 1095-7235, Vol. 187, article id 105023Article in journal (Refereed) Published
Abstract [en]

The past two decades have seen a considerable increase in the amount of public information providedby policymakers. Are such disclosures desirable? Or is it instead preferable to use such information tocondition a policy instrument, such a tax or an interest rate? This paper studies the relative merits of eachmeans 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 instrumentor disclosure is optimal. I then relate these to differences in the equilibrium and socially optimal use ofinformation. I conclude with a series of applications that show how my results apply to common beautycontest models, competitive economies, and a broad class of macroeconomic models, among others.

Place, publisher, year, edition, pages
2020. Vol. 187, article id 105023
Keywords [en]
Public information, Optimal policy
National Category
Economics
Identifiers
URN: urn:nbn:se:su:diva-191058DOI: 10.1016/j.jet.2020.105023OAI: oai:DiVA.org:su-191058DiVA, id: diva2:1535103
Available from: 2021-03-08 Created: 2021-03-08 Last updated: 2022-02-25Bibliographically approved

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Kohlhas, Alexandre

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