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dc.contributor.authorReinstein, D
dc.contributor.authorSong, J
dc.date.accessioned2019-03-01T16:08:04Z
dc.date.issued2019-02-28
dc.description.abstractPolicymakers often consider policies with (a) uncertain social benefits and (b) uncertain impacts on the value of private assets; we characterize six ways (a) and (b) may be inter-related. Where investors have private information over (b), policymakers may attempt to learn this through the response of asset markets to proposed policies. However, where this information is concentrated, an informed trader may profitably hide his information and “manipulate” the market. We show that it is nonetheless generically optimal for policymakers to listen and respond to asset markets, but under specified conditions they must commit (e.g., through “political capital”) to sometimes pursuing a policy even when the expected welfare effects are negative. Surprisingly, allowing traders to short-sell can make it easier for policymakers to induce truth-telling actions.en_GB
dc.identifier.urihttp://hdl.handle.net/10871/36180
dc.language.isoenen_GB
dc.publisherUniversity of Exeteren_GB
dc.relation.urlhttp://hdl.handle.net/10871/26685en_GB
dc.rights© 2019 The Author(s)en_GB
dc.subjectStrategic tradesen_GB
dc.subjectAsymmetric Informationen_GB
dc.subjectIndirect revelation mechanismsen_GB
dc.subjectPolicyen_GB
dc.subjectPrice Informativenessen_GB
dc.subjectRational Expectations Equilibriumen_GB
dc.titleListen to the market, hear the best policy decision, but don't always choose iten_GB
dc.typeWorking Paperen_GB
dc.date.available2019-02-28en_GB
dc.date.available2019-03-01T16:08:04Z
pubs.notesNot knownen_GB
dc.descriptionThis is an updated version of the 20 February 2014 working paper of the same title, which is available in ORE at http://hdl.handle.net/10871/26685en_GB
dc.rights.urihttp://www.rioxx.net/licenses/all-rights-reserveden_GB
rioxxterms.versionAMen_GB
rioxxterms.licenseref.startdate2019-02-28
rioxxterms.typeWorking paperen_GB
refterms.dateFCD2024-08-06T15:06:52Z
refterms.versionFCDAM
refterms.dateFOA2019-03-01T16:08:09Z


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