We consider optimal public provision of unemployment insurance when government’s ability to commit is imperfect. Imperfect commitment implies that full information revelation is generally suboptimal. The optimal contract can be decentralized by a joint system of unemployment and disability benefits.

We build a business-cycle model with dispersed information, and use it to develop a taxonomy for how the social value of information depends on nominal and real rigidities, on the sources of the business cycle, and on the conduct of monetary policy.

We study the effects of central bank balance sheet policies—namely, quantitative easing and foreign exchange interventions—in a model where people form expectations through the level-k thinking process.

We study optimal monetary policy and central bank information disclosure when the monetary authority has incomplete information about the aggregate state of the economy.

I study how market signals—such as stock prices—can help alleviate the severity of the asymmetric information problem in credit and liquidity management. By conditioning liquidity insurance on ex-post price signals, creditors are able to provide the borrowers with better incentives for truth-telling.

We study the policy implications of the endogeneity of information about the state of the economy. The optimal policies trade-off allocative efficiency for informational efficiency.

Comment on “Rigid Production Networks” by Pellet and Tahbaz-Salehi

Journal of Monetary Econonomics. July 2023, 137: 103-106.

paper