We investigate the empirical implications of myopic behaviour within an estimated medium-scale macroeconomic DSGE model. Our analysis provides a comprehensive and agnostic examination of the macroeconomic outcomes when households’ and firms’ beliefs deviate from rational expectations, as proposed by Gabaix (2020). The estimation on US data proposes a strong preference towards cognitive discounting and suggests: (i) an improvement in overall model fit and forecasting performance, (ii) more stimulative fiscal policy, (iii) demand shocks resembling uncertainty shocks where consumption and investment co-move, and (iv) a diminished efficacy of monetary policy. Notably, our empirical results support the presence of rational price setters.