Kurz, Mordecai; Piccillo, Giulia; Wu, Howei - In: Journal of Economic Dynamics and Control 37 (2013) 8, pp. 1403-1433
We explore a New Keynesian Model with diverse beliefs and study the aggregation problems in the log-linearized economy. We show the solution of these problems depend upon the belief structure. Agents' beliefs are described by individual state variables and satisfy three Rationality Axioms,...