Cycles, Gaps, and the Social Value of Information

@article{Angeletos2011CyclesGA,
  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},
  year={2011}
}
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
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