What is the difference between homogeneous-agent models and

Question

Suppose that an increase in people's expected inflation rate in the coming year would deduce their demand for money. How would a shock to the expected inflation affect output and the price level in the short run and in general equilibrium?

What is the difference between homogeneous-agent models and heterogeneous-agent models? Which do you think is more realistic? Which do you think are more difficult to work with because it is technically more complicated?

Answer 1

As the data that include your questions as below read all and give answer properly Assume that a raise in people's expected inflation rate in the coming year would reduce their demand for money. How would a shock to the supposed inflation influence output and the price level in the short run and in common equilibrium? What is the dissimilarity between homogeneous-agent models and heterogeneous-agent models? Which do you think is more realistic? Which do you think are harder to work through as it is technically more complicated?