Central bank communication design in a Lucas-Phelps economy
In a Lucas-Phelps island economy, an island has access to many informative signals about demand conditions. Each signal incorporates both public and private information: the correlation of a signal's realizations across the economy determines its publicity. If information sources differ in thei...
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ftlonbusinesssch:oai:lbsresearch.london.edu:149 2024-06-23T07:56:10+00:00 Central bank communication design in a Lucas-Phelps economy Myatt, D P Wallace, C 2014-02-02 https://lbsresearch.london.edu/id/eprint/149/ https://www.sciencedirect.com/science/article/pii/S0304393214000154?via%3Dihub unknown Elsevier Myatt, D P <https://lbsresearch.london.edu/view/lbs_authors/1483478.html> and Wallace, C (2014) Central bank communication design in a Lucas-Phelps economy. Journal of Monetary Economics, 63. pp. 64-79. ISSN 0304-3932 Article PeerReviewed 2014 ftlonbusinesssch 2024-06-10T23:44:09Z In a Lucas-Phelps island economy, an island has access to many informative signals about demand conditions. Each signal incorporates both public and private information: the correlation of a signal's realizations across the economy determines its publicity. If information sources differ in their publicity then price-formation and expectations-formation processes separate, causing output gaps to open. An output-stabilizing central bank prefers "averagely public" information, and sometimes limits the clarity of its policy announcements to achieve this. The bank's incentive to engage privately in costly information acquisition and transmission is strongest not for the most influential signals, but instead for those which drive the largest wedge between prices and expectations: signals that are far from averagely public. Article in Journal/Newspaper Phelps Island London Business School: LBS Research Online Phelps Island ENVELOPE(110.500,110.500,-66.283,-66.283) |
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London Business School: LBS Research Online |
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ftlonbusinesssch |
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In a Lucas-Phelps island economy, an island has access to many informative signals about demand conditions. Each signal incorporates both public and private information: the correlation of a signal's realizations across the economy determines its publicity. If information sources differ in their publicity then price-formation and expectations-formation processes separate, causing output gaps to open. An output-stabilizing central bank prefers "averagely public" information, and sometimes limits the clarity of its policy announcements to achieve this. The bank's incentive to engage privately in costly information acquisition and transmission is strongest not for the most influential signals, but instead for those which drive the largest wedge between prices and expectations: signals that are far from averagely public. |
format |
Article in Journal/Newspaper |
author |
Myatt, D P Wallace, C |
spellingShingle |
Myatt, D P Wallace, C Central bank communication design in a Lucas-Phelps economy |
author_facet |
Myatt, D P Wallace, C |
author_sort |
Myatt, D P |
title |
Central bank communication design in a Lucas-Phelps economy |
title_short |
Central bank communication design in a Lucas-Phelps economy |
title_full |
Central bank communication design in a Lucas-Phelps economy |
title_fullStr |
Central bank communication design in a Lucas-Phelps economy |
title_full_unstemmed |
Central bank communication design in a Lucas-Phelps economy |
title_sort |
central bank communication design in a lucas-phelps economy |
publisher |
Elsevier |
publishDate |
2014 |
url |
https://lbsresearch.london.edu/id/eprint/149/ https://www.sciencedirect.com/science/article/pii/S0304393214000154?via%3Dihub |
long_lat |
ENVELOPE(110.500,110.500,-66.283,-66.283) |
geographic |
Phelps Island |
geographic_facet |
Phelps Island |
genre |
Phelps Island |
genre_facet |
Phelps Island |
op_relation |
Myatt, D P <https://lbsresearch.london.edu/view/lbs_authors/1483478.html> and Wallace, C (2014) Central bank communication design in a Lucas-Phelps economy. Journal of Monetary Economics, 63. pp. 64-79. ISSN 0304-3932 |
_version_ |
1802649090414084096 |