Anderlini, Luca; Gerardi, Dino; Lagunoff, Roger - In: Review of Economic Dynamics 13 (2010) 3, pp. 559-574
This paper examines an equilibrium model of social memory -- a society's vicarious beliefs about its past. We show that incorrect social memory is a key ingredient in creating and perpetuating destructive conflicts. We analyze an infinite-horizon model in which two countries face off each period...