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Title

Government Information Transparency

AuthorsEsteban, Joan CSIC ORCID ; Albornoz, Facundo; Vanin, Paolo
KeywordsGovernment announcements
Cheap talk
Asymmetric information
Inequality
Issue Date14-May-2009
SeriesUFAE and IAE Working Papers ; 774.09
AbstractThis paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a benevolent government may ex-post be non-informative, in an attempt to countervail the tax distortion with a "second best" compensating distortion in information. This result provides a rationale for independent national statistical offices, committed to truthful communication. We also find that whether inequality in income distribution favors or harms government transparency depends on labor supply elasticity.
Description47 pages, 2 figures.-- JEL Classification Codes: D82, E61.
Publisher version (URL)http://pareto.uab.es/wp/2009/77409.pdf
URIhttp://hdl.handle.net/10261/14463
Appears in Collections:(IAE) Informes y documentos de trabajo
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