Learning Stability in Economies with Heterogenous Agents
Kaushik Mitra () and
Seppo Honkapohja ()
No 04/17, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London
An economy exhibits structural heterogeneity when the forecasts of di?erent 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 di?erent forms of heterogeneity in structure, forecasts, and adaptive learning rules a?ect the conditions for convergence of adaptive learning towards rational expectations equilibrium. Results are applied to a market model with speculative demand and a New Keynesian model of interest rate setting.
Keywords: Adaptive learning; expectations formation; stability of equilibrium; market model; inflation; monetary policy (search for similar items in EconPapers)
JEL-codes: D83 C62 E30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo and nep-mac
Date: 2004-07, Revised 2004-07
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Journal Article: Learning Stability in Economies with Heterogeneous Agents (2006)
Working Paper: Learning Stability in Economies with Heterogenous Agents (2002)
Working Paper: Learning stability in economics with heterogeneous agents (2002)
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