Forward Guidance without Common Knowledge

• 成果类型: Article
• 署名作者: Angeletos, George-Marios; Lian, Chen
• 署名单位: Massachusetts Institute of Technology (MIT)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20161996
• 发表日期: 2018
• 页码: 2477-2512
• 关键词: Incomplete information; Iterated expectations; rational inattention; sticky prices; social value; multiplier; MARKETS

摘要

How does the economy respond to news about future policies or future fundamentals? Standard practice assumes that agents have common knowledge of such news and face no uncertainty about how others will respond. Relaxing this assumption attenuates the general equilibrium effects of news and rationalizes a form of myopia at the aggregate level. We establish these insights within a class of games which nests, but is not limited to, the New Keynesian model. Our results help resolve the forward-guidance puzzle, offer a rationale for the front-loading of fiscal stimuli, and illustrate more broadly the fragility of predictions that rest on long series of forward-looking feedback loops.