Read My Lips: The Political Economy of Information Transmission
Timothy J. Besley
London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
Harvard University - Harvard Kennedy School (HKS)
LSE STICERD Research Paper No. TE355
The paper studies credible information transmission by governments. A group of heterogenous individuals have to make private investment and labour supply decisions while relying on the government for information about investment returns. The government consists of an elected citizen who chooses a redistributive strategy in addition to providing information. We give conditions under which the outcome leads to over- or under-investment in high-return activities and the outcome is Pareto efficient.
Number of Pages in PDF File: 36
JEL Classification: D20, D80, H11, H70, L22, P11working papers series
Date posted: July 16, 2008
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