A Positive Theory of Discretionary Policy, the Cost of Democratic Government and the Benefits of a Constitution - Errata

2018-06-30T17:42:41Z (GMT) by Alex Cukierman Allan Meltzer
<p>It was pointed to us by Shmuel Ben-Zvi that the article overlooks the fact that the government can increase the precision of its forecast of x<sub>t</sub>, as of the beginning of period t, by using the signal y<sup>1</sup><sub>t-1</sub> in addition to the signal y<sup>0</sup>t. Incorporation of this additional information into the government's information set changes none of the qualitative results of the paper but it does affect some of the algebra. The necessary changes are detailed in what follows</p>