Growth forecasts, belief manipulation and capital markets

B-Tier
Journal: European Economic Review
Year: 2014
Volume: 70
Issue: C
Pages: 108-125

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze how a benevolent, privately informed government agency would optimally release information about the economy׳s growth rate when the agents hold heterogeneous beliefs. We model two types of agent: “conforming” and “dissenting.” The former has a prior that is identical to that of the government agency, whereas the latter has a prior that differs from that of the government agency. We identify both informative and uninformative equilibria. Informative equilibria are equilibria in which the government agency׳s equilibrium signal leads to a revision of beliefs. We demonstrate that the uninformative equilibria can in fact dominate the informative ones in terms of ex post social welfare.

Technical Details

RePEc Handle
repec:eee:eecrev:v:70:y:2014:i:c:p:108-125
Journal Field
General
Author Count
2
Added to Database
2026-01-25