The 359th Wenlan Financial Forum

Abstract：

We develop a model economy with active financial markets in which a policymaker's adoption of a gradualistic approach constitutes a Bayesian Nash equilibrium. In our model, the ex ante policy proposal influences the supply side of the economy, while the ex post policy action affects the demand side and shapes market equilibrium. When choosing policies, the policymaker internalizes the impact of her decisions on the precision of the firm-value signal. Moreover, financial markets provide a price signal that informs the government. The policymaker learns about the productivity shocks not only from firm-value performance signals but also from financial market prices. Access to information through both channels creates strong incentives for the policymaker to adopt a gradualistic approach in a time-consistent manner. Smaller policy steps yield more precise information about the productivity shock. These results hold robustly for both exogenous and endogenous information models.

Speaker Introduction：

Gaowang  Wang is a Professor and Doctoral Supervisor at the Center for Economic Research, Shandong University. He holds a Ph.D. in Finance from Wuhan University and has been honored as a Young Scholar of the "Future Plan" and a "Qilu Young Scholar" at Shandong University. His research focuses on macroeconomics and financial theory, with a current emphasis on the role of information in financial markets and macroeconomic applications. He has published over 30 papers in prominent domestic and international economics journals, including the Journal of Economic Theory, Journal of Economic Dynamics and Control, Journal of Financial Markets, Economics Letters, Annals of Economics and Finance, and Economic Research. He has also led several major research projects, such as the General Program of the National Natural Science Foundation of China, the Youth Program of the Humanities and Social Sciences Foundation of the Ministry of Education, and the General and Special Support Programs of the China Postdoctoral Science Foundation.