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[U+05F3]s realizations across the economy determines its publicity. If information sources differ in th...
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Online Access: | https://research.manchester.ac.uk/en/publications/f0b4dd8f-346a-4771-8454-40c930f1c6ab https://doi.org/10.1016/j.jmoneco.2014.01.003 http://www.scopus.com/inward/record.url?scp=84896965188&partnerID=8YFLogxK |
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ftumanchesterpub:oai:pure.atira.dk:publications/f0b4dd8f-346a-4771-8454-40c930f1c6ab 2023-11-12T04:24:38+01:00 Central bank communication design in a Lucas-Phelps economy Myatt, David P. Wallace, Chris 2014-02-02 https://research.manchester.ac.uk/en/publications/f0b4dd8f-346a-4771-8454-40c930f1c6ab https://doi.org/10.1016/j.jmoneco.2014.01.003 http://www.scopus.com/inward/record.url?scp=84896965188&partnerID=8YFLogxK eng eng info:eu-repo/semantics/restrictedAccess Myatt , D P & Wallace , C 2014 , ' Central bank communication design in a Lucas-Phelps economy ' , Journal of Monetary Economics , vol. 63 , pp. 64-79 . https://doi.org/10.1016/j.jmoneco.2014.01.003 Central bank design Coordination in beauty-contest games Lucas-Phelps island economies Optimal announcements Public and private information article 2014 ftumanchesterpub https://doi.org/10.1016/j.jmoneco.2014.01.003 2023-10-30T09:14:13Z 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[U+05F3]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 The University of Manchester: Research Explorer Journal of Monetary Economics 63 64 79 |
institution |
Open Polar |
collection |
The University of Manchester: Research Explorer |
op_collection_id |
ftumanchesterpub |
language |
English |
topic |
Central bank design Coordination in beauty-contest games Lucas-Phelps island economies Optimal announcements Public and private information |
spellingShingle |
Central bank design Coordination in beauty-contest games Lucas-Phelps island economies Optimal announcements Public and private information Myatt, David P. Wallace, Chris Central bank communication design in a Lucas-Phelps economy |
topic_facet |
Central bank design Coordination in beauty-contest games Lucas-Phelps island economies Optimal announcements Public and private information |
description |
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[U+05F3]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, David P. Wallace, Chris |
author_facet |
Myatt, David P. Wallace, Chris |
author_sort |
Myatt, David 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 |
publishDate |
2014 |
url |
https://research.manchester.ac.uk/en/publications/f0b4dd8f-346a-4771-8454-40c930f1c6ab https://doi.org/10.1016/j.jmoneco.2014.01.003 http://www.scopus.com/inward/record.url?scp=84896965188&partnerID=8YFLogxK |
genre |
Phelps Island |
genre_facet |
Phelps Island |
op_source |
Myatt , D P & Wallace , C 2014 , ' Central bank communication design in a Lucas-Phelps economy ' , Journal of Monetary Economics , vol. 63 , pp. 64-79 . https://doi.org/10.1016/j.jmoneco.2014.01.003 |
op_rights |
info:eu-repo/semantics/restrictedAccess |
op_doi |
https://doi.org/10.1016/j.jmoneco.2014.01.003 |
container_title |
Journal of Monetary Economics |
container_volume |
63 |
container_start_page |
64 |
op_container_end_page |
79 |
_version_ |
1782339124041089024 |