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

2012-06-24T00:00:00Z (GMT) by Alex Cukierman Allan Meltzer

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 xt, as of the beginning of period t, by using the signal y1t-1 in addition to the signal y0t. 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