Agent-based macroeconomics: A baseline model
Journal of Economic Behavior & Organization, 2013, vol. 86, issue C, pages 102-120
This paper develops a baseline agent-based macroeconomic model and contrasts it with the common dynamic stochastic general equilibrium approach. Although simple, the model can reproduce a lot of the stylized facts of business cycles. The author argues that agent-based modeling is an adequate response to the recently expressed criticism of macroeconomic methodology because it allows for aggregate behavior that is more than simply a replication of microeconomic optimization decisions in equilibrium. At the same time it allows for absolutely consistent microfoundations, including the structure and properties of markets. Most importantly, it does not depend on equilibrium assumptions or fictitious auctioneers and does therefore not rule out coordination failures, instability and crisis by definition. A situation that is very close to a general equilibrium can instead be shown to result endogenously from non-rational micro interaction.
Keywords: Agent-based macroeconomics; Complex adaptive systems; Microfoundations; Emergence; Complexity (search for similar items in EconPapers)
JEL-codes: B4 E1 E50 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (29) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Agent-based macroeconomics - a baseline model (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:eee:jeborg:v:86:y:2013:i:c:p:102-120
Access Statistics for this article
Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart
More articles in Journal of Economic Behavior & Organization from Elsevier
Series data maintained by Shamier, Wendy ().