I develop methods for solving dynamic economic models with heterogeneous information, with applications to business cycle fluctuations (price-setting) and asset pricing. The analysis requires only a minimal set of assumptions on the information structure, and provides analytical or quantitative...

about fundamentals based on their own cash flows (revenues and wages). We show that in a model with realistic levels of product-level price dispersion, the firms’ inference about aggregate shocks is very gradual, yet in the aggregate prices adjust rapidly in response to aggregate nominal...

A contentious debate in finance revolves around whether investment managers add any value for their clients. Presumably, households delegate the investment decision because these managers are able to process information and use it efficiently to generate additional return. The raises the...

set to compare our calibrated model to the time-series and geographic patterns of participation.