Confidence is the state of being clear-headed: either that a hypothesis or prediction is correct, or that a chosen course of action is the best or most effective. Confidence comes from the Latin word fidere which means "to trust". In contrast, arrogance or hubris is a state of unmerited confidence—belief lacking evidence and/or a reason. Overconfidence or presumptuousness is excessive belief in success without regard for potential failure. Confidence can be a self-fulfilling prophecy, as those without it may fail because they lack it, and those with it may succeed because they have it rather than because of an innate ability or skill. We develop a tractable method for augmenting macroeconomic models with autonomous variation in higher-order beliefs