This paper proposes a method to structurally estimate a model with a regime shift and evaluates the importance of acknowledging the break in the estimation. We estimate a DSGE model on Swedish data taking into account the regime change in 1993, from exchange rate targeting to inflation...

Heterogeneity in planning propensity affects wealth inequality and asset prices. This paper presents an economy where attentive agents plan their consumption period by period, while inattentive agents plan every other period. Inattentive consumers face more uncertainty and trade at unfavorable...