The role of monetary policy as it affects available information is examined in an equilibrium model of the business cycle. Exogenous, uncertain changes in the expected return to capital assets relative to money holding are shown to induce revisions in investors' desired portfolios. Under a passive policy, asset market equilibrium requires a change in the value of money, which, if imperfectly perceived, detracts from the signaling aspect of observed prices. Active money growth feedback rules are examined as altering the prospective return to money holding. A policy may be designed to maintain the relative attractiveness between real capital and money even if the controlling authority has no informational advantage. Such a policy is shown to obviate the need for portfolio revisions to assure informational efficiency.

The inability to observe the money supply and price level has been an essential ingredient of informational based equilibrium models of cycles. Here we assume these data are available but show that heterogeneous information about the productivity of capital can lead to a monetary theory of fluctuations. In equilibrium, each agent's investment depends on the difference between his own productivity and the perceived real rate. In the presence of money demand shocks, the nominal rate is noisy signal of the real rate. This leads to greater fluctuations in output than if all agents had the same information.

The primary purpose of unemployment insurance (U.I.) is no doubt to insure individuals against loss of wage income. However, U.I. is commonly believed to adversely affect job search behavior and to lengthen the duration of unemployment. With these issues in mind, this paper asks how U.I. benefits ought to be paid out over time. Specifically, the paper uses a theoretical model to determine characteristics of the time sequence of benefits that maximizes the expected utility of the unemployed, given that they act in a self-interested way and given the total size of the U.I. budget.