about fundamentals based on their own cash flows (revenues and wages). We show that in a model with realistic levels of product-level price dispersion, the firms’ inference about aggregate shocks is very gradual, yet in the aggregate prices adjust rapidly in response to aggregate nominal...

I develop methods for solving dynamic economic models with heterogeneous information, with applications to business cycle fluctuations (price-setting) and asset pricing. The analysis requires only a minimal set of assumptions on the information structure, and provides analytical or quantitative...