Baeriswyl, Romain; Cornand, Camille - London School of Economics (LSE) - 2006
instrument and the central bank optimally balances the action and information purposes of its instrument. We derive the optimal … the central bank is more inclined towards price stabilization, (iv) when firms have relatively precise private information …, and (v) when the central bank's information is relatively precise on demand shocks and relatively imprecise on mark …