Cycles, Gaps, and the Social Value of Information

  title={Cycles, Gaps, and the Social Value of Information},
  author={G. Angeletos and Luigi Iovino and Jennifer La'O},
  journal={Information Systems: Behavioral \& Social Methods eJournal},
What are the welfare effects of the information contained in macroeconomic statistics, central-bank communications, or news in the media? We address this question in a business-cycle framework that nests the neoclassical core of modern DSGE models. Earlier lessons that were based on "beauty contests" (Morris and Shin, 2002) are found to be inapplicable. Instead, the social value of information is shown to hinge on essentially the same conditions as the optimality of output stabilization… Expand
Rational Inattention to News: The Perils of Forward Guidance
This paper studies the social value of information about the future. In a stylized OLG model, agents need to forecast the future price level, they observe the current price and perceive withExpand
Information Design, Signaling, and Central Bank Transparency
This study examines monetary policy and central bank communication when a monetary instrument signals the central bank's private information. A novel feature is that the central bank ex anteExpand
Information Acquisition and Learning from Prices Over the Business Cycle
We study firms’ incentives to acquire costly information in booms and recessions to understand the role of endogenous information in explaining business cycles. We find that when the economy has beenExpand
Learning-by-Sharing: Monetary Policy and the Information Content of Public Signals
This paper studies the effect of a central bank releasing public information about the state of the economy in a dispersed information business cycle model in which market participants learn from theExpand
Investment , Welfare and the Informativeness of Financial Markets
Asset prices aggregate information about current and future productivity. More information allows firms to make better investment decisions, potentially increasing social welfare. In this paper, IExpand
Man-Bites-Dog Business Cycles
The newsworthiness of an event is partly determined by how unusual it is and this paper investigates the business cycle implications of this fact. In particular, we analyze the consequences ofExpand
Information Acquisition and Welfare LUCA COLOMBO
We study information acquisition in a flexible framework with strategic complementarity or substitutability in actions and a rich set of externalities that are responsible for possible wedges betweenExpand
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׳sExpand
Optimal Central Bank Disclosure in a Business Cycle Model
I study the social value of information in a New Keynesian model of monopolistic pricesetting with dispersed information, where the central bank can choose what information to share with the public.Expand
Optimal Monetary Policy and Transparency under Informational Frictions
This paper examines the optimal monetary policy and central bank transparency in an economy where firms set prices under informational frictions. The economy is subject to two types of shocksExpand


Dispersed Information over the Business Cycle: Optimal Fiscal and Monetary Policy !
We study how the heterogeneity of information impacts the efficiency of the business cycle and the design of optimal fiscal and monetary policy. We do so within a model that features a standardExpand
Noisy Business Cycles
This paper investigates a real-business-cycle economy that features dispersed information about the underlying aggregate productivity shocks, taste shocks, and, potentially, shocks to monopoly power.Expand
Optimal Policy Intervention and the Social Value of Public Information
Svensson (2006) argues that Morris and Shin (2002) is, contrary to what is claimed, pro-transparency. This paper reexamines the issue but with an important modification to the original Morris andExpand
Markups, Gaps, and the Welfare Costs of Business Fluctuations
In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household's consumption/leisureExpand
Policy with Dispersed Information
This paper studies policy in a class of economies in which information about commonly-relevant fundamentals -- such as aggregate productivity and demand conditions -- is dispersed and can not beExpand
Shocks and Frictions in U.S. Business Cycles: A Bayesian DSGE Approach
Using a Bayesian likelihood approach, we estimate a dynamic stochastic general equilibrium model for the US economy using seven macro-economic time series. The model incorporates many types of realExpand
On the Sources and Value of Information: Public Announcements and Macroeconomic Performance
In the context of macroeconomic coordination, studies of the social value of information distinguish sharply between private and public information. However, no information is truly public (that is,Expand
A Theory of Demand Shocks
This paper presents a model of business cycles driven by shocks to consumer expectations regarding aggregate productivity. Agents are hit by heterogeneous productivity shocks, they observe their ownExpand
Galí J: Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework
The magician of monetary economics, Jordi Galí, has been impressing us with his tricks for more than a decade now. Without any doubt, he is one of the most influential architects of the New KeynesianExpand
Abstract Introducing private information into the dynamic pricing decision of firms by adding an idiosyncratic component to marginal cost can help explain two stylised facts about price changes:Expand