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Behavioral Heterogeneous Agent Model by peppe.failla27 is a document available to read on EtoBox.

The document presents a New Keynesian model incorporating household heterogeneity and bounded rationality, which amplifies the effects of monetary and fiscal policy while resolving the forward guidance puzzle. The model demonstrates that central banks must raise nominal interest rates significantly after inflationary shocks to stabilize inflation, resulting in higher government debt levels. By integrating these frictions, the model aligns with empirical evidence and offers insights into the dynamics of cons

Author

peppe.failla27

Language

EN