The Social Value of Cost Information in a Monopolistically Competitive Economy

An economy with monopolistic competition is endowed with an information system that produces a public information signal correlated to uncertain costs of production. Investment in the monopolistic competition sector is determined by consumers' savings under uncertainty. Savings are always lower than their efficient levels in the presented economy. If consumers' preferences exhibit prudence, then an improvement of the underlying information system (in the sense of Blackwell 1953 ) leads to a decrease of expected savings. The social value of information may be negative in that case from an ex ante point of view. Better information may strengthen the market failure caused by imperfect competition. Without precautionary saving (negative prudence), the social value of information is always positive.     

Explaining Monetary Spillovers: The Matrix Reloaded

This paper relies on a high-frequency identification approach to provide new insights into monetary policy spillovers by major central banks. Our long and broad sample (1999–2019, from four major economies to 47 advanced and emerging market economies) allows us to accurately identify the properties of spillovers and to shed light on different transmission channels. We find that spillovers by the Fed to foreign interest rates are economically large, but more surprisingly, document an intensification of spillovers by the European Central Bank over time. Spillovers are more significant to bond yields in advanced economies than they are to those in emerging markets. Differentiating across key spillover channels, we find strongest support for a financial links channel, but weaker evidence for the macroeconomic links channel and foreign exchange regime channel.