Abstract: The paper incorporates ACE theory into the framework of Neo-Keynesian DSGE model to construct Agent-based Neo-Keynesian model, and studies the impact of monetary policy on macroeconomic fluctuation by the new model. The result shows that 25% of the households in our economy are completely rational, and 73% of them are bounded rationality; the response of output and inflation to the impact of monetary policy is mild and lasts longer than the traditional Neo-Keynesian model; the impact of monetary policy is the main source of inflation fluctuations, and the preference shocks of real currency balances can explain most of the output fluctuations. Therefore, after considering the bounded rationality and adaptive expectation, the internal transmission mechanism of economy has changed, and understanding the public expectation form is of vital importance to the analysis of macroeconomic policy.

Key words: bounded rationality, heterogeneous macro expectations, ACE model, Neo-Keynesian model