The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. The private sector is assumed to have information about the state of the...

The relationship between asset prices and fundamentals is characterized by both disconnect and predictability: asset prices are largely disconnected from current publicly observed fundamentals and at the same time contain information about future fundamentals, even when conditioning on current...

Die internationalen Finanzmärkte wurden in den letzten Jahren von einer Reihe folgenschwerer Währungskrisen heimgesucht. Zahlreiche Vorschläge für eine effizientere Krisenprävention werden seither diskutiert. Eine zentrale Idee ist die stärkere Nutzung von Frühwarnsystemen zur...

Do public policy signals improve the alignment of market outcomes with economic fundamentals? Existing work contends that, when individual players have an incentive to coordinate their actions, public policy signals could steer these actions away from the fundamentals. We argue that such a...

Order imbalances are often taken to be a reflection of trading by informed investors. Yet order imbalances may simply be random shocks, and the price effects associated with the imbalances may reflect the inventory pressures of unbalanced trading rather than information conveyed by informed...