Social Value of Public Information: Morris and Shin (2002) Is Actually pro Transparency, Not Con *
نویسندگان
چکیده
The main result of Morris and Shin (2002)–restated in papers by Amato, Morris, and Shin (2002) and Amato and Shin (2003) and commented upon by the Economist (2004)–has been presented and interpreted as an anti-transparency result: more public information can be bad. However, some scrutiny of the result shows that it is actually pro transparency: except in very special circumstances, more public information is good. Furthermore, for a conservative benchmark of equal precision in public and private information, social welfare is higher than in a situation without public information. JEL Classification: D82, D83, E52, E58
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Social Value of Public Information: Morris and Shin (2002) Is Actually Pro-Transparency, Not Con: Reply
The comment by Lars Svensson (2006) is an important contribution to the debate on the welfare effects of public information. Morris and Shin (2002) had shown that the provision of more precise public information can, in principle, be detrimental to welfare, but Svensson’s note opens the debate on the quantitative significance of the result. Svensson (2006) makes two observations. First, the res...
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