This paper examines optimal policy when agents, private investors and a government, can learn about the economy by observing others. Investors can delay investment in order to exploit future information. Importantly, investors ignore the informational value of their actions to others when...

The paper is the first one outside the high-frequency domain to use sentiment-signednews to directly compare news and no-news stock returns. This is done by estimatingwhether returns on positive, neutral and negative news days are significantly differentfrom the average daily return for a large...