We propose a signalling model in which the central bank and firms receive information on cost-push shocks independently of each other. If the firms are rather unlikely to receive information directly, the central bank should remain silent about its own private information. If, however, firms are sufficiently likely to be informed,. it is socially desirable for the central bank to reveal its own...

To what extent does the formal institutional environment influence Islamic bank capital decisions? We answer this question by assessing effect of legal rule index on a sample 100 banks in 28 countries from 1999 to 2013. Our econometric analyses show that positively and significantly influences ratios. The results can be explained idea effective rules incentivize hold higher ratios signal better...

Monetary policy as a tool for expectations management is believed to be most effective if it can coordinate the beliefs and expectations of the economic agents. The optimal communication policy is in an environment where central bank announcements are common knowledge and abundant information is complete transparency. The above conclusion is altered in the more realistic situation where economi...

information asymmetry in stock market can increase the risk of investment which in turn increases the capital cost of firms. bhattacharya (1979) proposed a hypothesis that states dividend can act as a powerful signal in order to solve information asymmetry problem. we measured information asymmetry by lack of earnings transparency. therefore we examine the effect of earnings transparency on cap...

By providing guidance about future economic developments, central banks can a¤ect private sector expectations and decisions. This can improve welfare by reducing the e¤ects of asymmetric information and by leading to smaller forecast errors. But it can also magnify the impact of noise in the central bank’s forecasts. I employ a model of heterogeneous information to compare outcomes under opaque...

this research intends to investigate the relationship between financial information transparency and investor behavior in tse, in order to provide safety trade and improve performance of the financial market in iran. in last decade transparency of the financial market has been known as one of the most effective variables in determining investor strategy. this study examines perception of transp...