We analyze differences in consumption and wealth that arise because of different degrees of rationality of households … other fraction possesses less cognitive ability. We identify the rationality bias of boundedly rational agents, defined as a … rationality bias can be decomposed into three individual components: the consumption expectation bias, the real interest rate bias …

We analyze differences in consumption and wealth that arise because of different degrees of rationality of households … other fraction possesses less cognitive ability. We identify the rationality bias of boundedly rational agents, defined as a … rationality bias can be decomposed into three individual components: the consumption expectation bias, the real interest rate bias …

macro-model that allows for the role of bounded rationality and heterogeneous agents, we obtain tempered responses for real …