Agent-based modeling at central banks: recent developments and new challenges

András Borsos (), Adrian Carro (), Aldo Glielmo (), Marc Hinterschweiger (), Jagoda Kaszowska-Mojsa () and Arzu Uluc ()
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András Borsos: Magyar Nemzeti Bank, Complexity Science Hub Vienna, University of Oxford
Adrian Carro: University of Oxford, Banco de España
Aldo Glielmo: Bank of Italy
Marc Hinterschweiger: Bank of England
Jagoda Kaszowska-Mojsa: University of Oxford, Narodowy Bank Polski, Polish Academy of Sciences
Arzu Uluc: Bank of England

No 956, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Over the past decade, agent-based models (ABMs) have been increasingly employed as analytical tools within economic policy institutions. This paper documents this trend by surveying the ABM-relevant research and policy outputs of central banks and other related economic policy institutions. We classify these studies and reports into three main categories: (i) applied research connected to the mandates of central banks; (ii) technical and methodological research supporting the advancement of ABMs; and (iii) examples of the integration of ABMs into policy work. Our findings indicate that ABMs have emerged as effective complementary tools for central banks in carrying out their responsibilities, especially after the extension of their mandates following the global financial crisis of 2007 09. While acknowledging that there remains room for improvement, we argue that integrating ABMs into the analytical frameworks of central banks can support more effective policy responses to both existing and emerging economic challenges, including financial innovation and climate change.

Keywords: agent-based models; household analysis; financial analysis; central bank policies; monetary policy; prudential policies (search for similar items in EconPapers)
JEL-codes: C63 E37 E42 E52 E58 G1 G2 G5 Q54 R2 (search for similar items in EconPapers)
Date: 2025-07
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_956_25

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