Recent research shows that several DSGE models provide a closer fit to the data under adaptive learning. This paper extends this research by introducing adaptive learning in the model of Krusell and Smith (1998) with uninsurable idiosyncratic risks and aggregate uncertainty. A first contribution...

This paper introduces statistical learning in an asset pricing model of differences of opinions. I show that the model converges to the unique rational-expectation equilibrium and furthermore I show that asset prices drift predictably in its neighborhood. Accordingly, the model offers a unifying...