Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76098
Authors: 
Honkapohja, Seppo
Mitra, Kaushik
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 772
Abstract: 
An economy exhibits structural heterogeneity when the forecasts of different agents have different effects on the determination of aggregate variables. Various forms of structural heterogeneity can arise and 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 the market model with supply lags and a New Keynesian model of interest rate setting.
Subjects: 
adaptive learning
expectations formation
stability of equilibrium
market model
monetary policy.
JEL: 
C62
D83
E37
Document Type: 
Working Paper

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