—the liquidity premium. We rationalize this finding in an estimated heterogeneous-agent New-Keynesian (HANK) model with incomplete …

- we employ data of 22 European countries to assess the role of heterogeneity of the marginal propensity to consume (MPC …) for fiscal policy in the Euro area. We document an average MPC of 0.46 in the Euro area and illustrate its heterogeneity … (empirically measured heterogeneity of) MPC affects fiscal policy and makes it more effective in stimulating GDP growth than under …

add persistent heterogeneity in cognitive skills and overconfidence to an otherwise standard HANK model. Overconfidence …Business cycle models often abstract from persistent household heterogeneity, despite its potentially significant …