Commitments, Discreetness and Discretion of PolicyMakers with Private Information

When a policymaker is better informed than the public, public beliefs about the hidden informationemerge as additional state variables, managed by the policymaker. General methodsare presented to compute optimal commitment and discretion policies.Under commitment, policy is additive in two components: The optimal policy, as if thegovernment shared the public’s information set and the systematic manipulation of that informationset. Even under discretion, belief management imparts history dependence.[...]