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 and Institute for New Economic Thinking at the Oxford Martin SchoolMagyar Nemzeti Bank, Complexity Science Hub Vienna and Institute for New Economic Thinking at the Oxford Martin School
Adrian Carro: Banco de España and Institute for New Economic Thinking at the Oxford Martin School
Jagoda Kaszowska-Mojsa: Narodowy Bank Polski, Institute for New Economic Thinking at the Oxford Martin School and Institute of Economics, Polish Academy of Sciences
Arzu Uluc: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 1122, Bank of England working papers from Bank of England

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 room for improvement remains, 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 institutions; central bank policies; monetary policy; prudential policies (search for similar items in EconPapers)
JEL-codes: C63 E37 E58 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2025-02-28
New Economics Papers: this item is included in nep-hme and nep-mon
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Working Paper: Agent-based modeling at central banks: recent developments and new challenges (2025)
Working Paper: Agent-based modeling at central banks: recent developments and new challenges (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1122

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