Central bank's stabilization and communication policies when firms have motivated overconfidence in their own information accuracy or processing - Archive ouverte HAL
Pré-Publication, Document De Travail Année : 2021

Central bank's stabilization and communication policies when firms have motivated overconfidence in their own information accuracy or processing

Résumé

Using a simple microfounded macroeconomic model with price making firms and a central bank maximizing the welfare of a representative household, it is shown that the presence of firms' motivated beliefs has stark consequences for the conduct of optimal communication and stabilization policies. Under pure communication (resp. communication and stabilization policies), motivated beliefs about own private information (resp. own ability to process information) reverse the bang-bang solution of transparency (resp. opacity with full stabilization) found in the literature under objective beliefs and lead to intermediate levels of communication (and stabilization).
Fichier principal
Vignette du fichier
2118.pdf (524.2 Ko) Télécharger le fichier
Origine Fichiers produits par l'(les) auteur(s)

Dates et versions

hal-03468889 , version 1 (07-12-2021)

Identifiants

  • HAL Id : hal-03468889 , version 1

Citer

Camille Cornand, Rodolphe dos Santos Ferreira. Central bank's stabilization and communication policies when firms have motivated overconfidence in their own information accuracy or processing. 2021. ⟨hal-03468889⟩
39 Consultations
84 Téléchargements

Partager

More