This paper reviews the literature examining the consequences of heterogeneity in macroeconomic modeling, especially within the context of monetary and fiscal policy transmission. This review reveals that heterogeneity can significantly alter the transmission mechanisms of monetary policy in macroeconomic models and suggests possible advantages from collaboration between fiscal and monetary policies. The paper also provides a critical evaluation of various analytical (limited-heterogeneity, history truncation, no-trade equilibrium) and numerical methods (forecasting rules, linearization in state-space or sequence-space, global methods) to solve macroeconomic models with heterogeneity, underscoring how these methods relate to each other, while emphasizing the need for a careful methodological choice based on specific circumstances.