Public and Private Information in Monetary Policy Models

81 Pages Posted: 20 Sep 2007

See all articles by Jeffery D. Amato

Jeffery D. Amato

Goldman Sachs International

Hyun Song Shin

Bank for International Settlements (BIS)

Date Written: September 2003

Abstract

This paper examines the impact of public information in an economy where agents also have diverse private information. Since disclosures by central banks are an important source of public information, we are able to assess how the words of central bankers shape expectations, in addition to their actions. In an otherwise standard macro model, the disproportionate role of public information degrades the information value of economic outcomes, alters the welfare consequences of increased precision of public information and generates distinctive time series characteristics of some macro variables.

On 28-29 March 2003, the BIS held a conference on "Monetary stability, financial stability and the business cycle". This event brought together central bankers, academics and market participants to exchange views on this issue (see the conference programme and list of participants in this document). This paper was presented at the conference. Also included in this publication are the comments by the discussants. The views expressed are those of the author(s) and not those of the BIS.

The opening speech at the conference by the BIS General Manager and the prepared remarks of the four participants on the policy panel are being published in a single volume in the BIS Papers series.

Keywords: Imperfect information, monopolistic competition, targeting

JEL Classification: D43, D82, D84, E31, E52

Suggested Citation

Amato, Jeffery D. and Shin, Hyun Song, Public and Private Information in Monetary Policy Models (September 2003). BIS Working Paper No. 138. Available at SSRN: https://ssrn.com/abstract=794568 or http://dx.doi.org/10.2139/ssrn.794568

Jeffery D. Amato (Contact Author)

Goldman Sachs International ( email )

United States

Hyun Song Shin

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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