Learning Stability in Economics with Heterogenous Agents
Copyright policy )Learning Stability in Economics with Heterogenous Agents
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.
- Royal Holloway University of London United Kingdom
- University of Cambridge United Kingdom
- Centre for Economic Policy Research United Kingdom
- University of St Andrews United Kingdom
- Aalto University Finland
monetary policy., 330, ddc:330, E37, monetary policy, Adaptive learning, Faculty of History and Social Science\Economics, adaptive learning, market model, C62, D83, adaptive learning, expectations formation, stability of equilibrium, market model, monetary policy., expectations formation, stability of equilibrium, inflation, Adaptive learning, expectations formation, stability of equilibrium, overlapping generations model, inflation, monetary policy, E30, jel: jel:C62, jel: jel:D83, jel: jel:E30, jel: jel:E37
monetary policy., 330, ddc:330, E37, monetary policy, Adaptive learning, Faculty of History and Social Science\Economics, adaptive learning, market model, C62, D83, adaptive learning, expectations formation, stability of equilibrium, market model, monetary policy., expectations formation, stability of equilibrium, inflation, Adaptive learning, expectations formation, stability of equilibrium, overlapping generations model, inflation, monetary policy, E30, jel: jel:C62, jel: jel:D83, jel: jel:E30, jel: jel:E37
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