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The Social Value of Information in a Business-Cycle Model

Author

Listed:
  • Luigi Iovino

    (Bocconi University)

  • Jennifer La'O

    (Columbia University)

  • George-Marios Angeletos

    (M.I.T.)

Abstract

Does welfare improve when firms have more information about the state of the economy and can better coordinate their production and pricing decisions? We address this question in a business-cycle model that highlights how informational frictions can be the source of both nominal and real rigidity. We then elaborate on how the answer to this question depends on each of these rigidities, on the sources of the business cycle, and on the conduct of monetary policy.

Suggested Citation

  • Luigi Iovino & Jennifer La'O & George-Marios Angeletos, 2015. "The Social Value of Information in a Business-Cycle Model," 2015 Meeting Papers 1299, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:1299
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    References listed on IDEAS

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    1. Jennifer La'O & George-Marios Angeletos, 2009. "Dispersed Information over the Business Cycle: Optimal Fiscal and Monetary Policy," 2009 Meeting Papers 221, Society for Economic Dynamics.
    2. N. Gregory Mankiw & Ricardo Reis, 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1295-1328.
    3. Mr. Mauro F Roca, 2010. "Transparency and Monetary Policy with Imperfect Common Knowledge," IMF Working Papers 2010/091, International Monetary Fund.
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    6. Jordi Galí, 2008. "Introduction to Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework," Introductory Chapters, in: Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework, Princeton University Press.
    7. Leonardo Melosi, 2009. "A Likelihood Analysis of Models with Information Frictions," 2009 Meeting Papers 1034, Society for Economic Dynamics.
    8. Adam, Klaus, 2007. "Optimal monetary policy with imperfect common knowledge," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 267-301, March.
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    15. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
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