Learning Stability in Economies with Heterogenous Agents

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.