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Journal Article

Vagueness, credibility, and government policy


Abstract: A discussion of the reasons why it may be in a government agency's--and society's--best interest to be vague about policy objectives. Using the concept of \"cheap talk,\" the author explains that when an agency faces a trade-off between precise and credible announcements, its best move may be to provide truthful but limited information.

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Review

Publication Date: 1995

Issue: Q I

Pages: 13-19