In this paper we discuss the role of the cross-sectional heterogeneity of beliefs in the context of understanding and … volatility in the US. - Heterogeneous beliefs ; business cycles ; regime-switching ; forecasting ; endogenous transition …

beliefs, generating positive price-quantity comovement. The feedback of beliefs into prices can be so strong that even …

and the central bank information shock) have different impacts on firms' beliefs. Fourth, we find that conventional and …, with a contractionary shock leading to a downward revision of expectations. Second, we show that firms' response depends on … the size and the sign of the shock, with only large and contractionary shocks having a significant negative effect on …

This paper provides novel information on the propagation of the pandemic-induced real shock to firms' financial … higher indebtedness and, hence, less capacity to deal with a liquidity shock. Conditional on these factors, firm size does …