Learning stability in economies with heterogeneous agents

Seppo Honkapohja, Kaushik Mitra

Research output: Contribution to journalArticlepeer-review

34 Citations (Scopus)


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.
Original languageEnglish
Pages (from-to)284-309
JournalReview of Economic Dynamics
Issue number2
Early online date20 Feb 2006
Publication statusPublished - Apr 2006


  • Adaptive learning
  • Expectations formation
  • Stability of equilibrium
  • Overlapping generations model
  • Inflation
  • monetary policy uncertainty


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