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Learning Stability in Economies with Heterogeneous Agents

Seppo Honkapohja () and Kaushik Mitra ()

Review of Economic Dynamics, 2006, vol. 9, issue 2, 284-309

Abstract: An economy exhibits structural heterogeneity when the forecasts of different agents have different effects on the determination of aggregate variables. We study the important case of economies in which agents' behavior depends on forecasts of aggregate variables and show how different forms of heterogeneity in structure, forecasts, and adaptive learning rules affect the conditions for convergence of adaptive learning towards rational expectations equilibrium. Results are applied to an overlapping generations model and a New Keynesian model of monetary policy. (Copyright: Elsevier)

Keywords: Adaptive learning; expectations formation; stability of equilibrium; overlapping generations model; inflation; monetary policy (search for similar items in EconPapers)
JEL-codes: D83 C62 E30 (search for similar items in EconPapers)
Date: 2006
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Related works:
Working Paper: Learning Stability in Economies with Heterogenous Agents (2004) Downloads
Working Paper: Learning Stability in Economies with Heterogenous Agents (2002) Downloads
Working Paper: Learning stability in economics with heterogeneous agents (2002) Downloads
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DOI: 10.1016/j.red.2006.01.003

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