The authors express thanks to two anonymous referees for their helpful comments and suggestions. Generous financial support for the research contained in this paper from the Royal Economic Society (James) and the Leverhulme Trust (Lawler) is gratefully acknowledged.
Strategic Complementarity, Stabilization Policy, and the Optimal Degree of Publicity
Article first published online: 22 MAY 2012
© 2012 The Ohio State University
Journal of Money, Credit and Banking
Volume 44, Issue 4, pages 551–572, June 2012
How to Cite
JAMES, J. G. and LAWLER, P. (2012), Strategic Complementarity, Stabilization Policy, and the Optimal Degree of Publicity. Journal of Money, Credit and Banking, 44: 551–572. doi: 10.1111/j.1538-4616.2012.00501.x
- Issue published online: 22 MAY 2012
- Article first published online: 22 MAY 2012
- Received January 14, 2011; and accepted in revised form December 14, 2011.
- strategic complementarity;
- public disclosure;
- policy intervention
This paper examines the welfare implications of public information dissemination within a model in which information is heterogeneous across agents and where a strategic complementarity is present. The focus of the analysis is on how the presence of stabilization policy affects the case for transparency. In considering this issue, it extends James and Lawler's (2011) contribution by incorporating an alternative payoff function and by employing a different representation of public disclosure. The study's key finding is that the conclusions drawn in its precursor are robust to these modifications; specifically, in the presence of optimally designed policy intervention zero transparency maximizes welfare.