EDGEWORTH EXPANSIONS FOR SPECTRAL DENSIT
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Velasco, Carlos ;Robinson, Peter M.
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Article
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2001
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Cambridge University Press
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English
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We advance the theory that the distribution of beliefs in the market is the most important propagation mechanism of economic volatility. Our model is based on the theory of Rational Beliefs (RB) and Rational Belief Equilibrium (RBE) developed by Kurz (1994Kurz ( , 1997)). We argue that the diverse m