working_paper

In many economies, long periods of steady growth in aggregate wealth are repeatedly interrupted by pronounced asset-price boom-bust episodes, and real activity typically moves with wealth in such episodes. I build a quantitative life-cycle model of …

People often process numbers in simplified ways. One such simplification is left-digit bias, the tendency to give more weight to the leftmost digit of a number. We study whether this bias affects how households process inflation numbers when forming …