This paper studies the dynamic volatility properties of a monetary economy in which agents hold Rational Beliefs (see … paper demonstrates a) The RBE paradigm offers an integrated theory of real and financial volatility with a high volume of … trade. Most volatility in an RBE is induced endogenously through the beliefs of agents.b) Although our RBE assumes fully …

from policy actions at home and abroad that add to the significant macroeconomic volatility that is already created by …