Can Artificial Economies Help us Understand Real Economies?

Alan Kirman

Revue de l'OFCE, 2012, vol. N° 124, issue 5, 15-41

Abstract: This paper argues that the path followed by modern macroeconomic theory excludes the analysis of major endogenous movements in macroeconomic variables. Rather than persist with models based on the idea that the economy behaves like a rational individual we should build models of the economy as a complex system of interacting agents. Profiting from the advances made in computer science we can now build agent based or computational models which allow us to model the out of equilibrium behaviour of such systems. They allow us to remove many of the restrictive assumptions of standard models and to incorporate the heterogeneity of economic agents and the evolution of the network that governs the interactions between the individuals and firms in the economy. Such models can help fill the theoretical void with which policymakers declare that they have been faced in the current crisis.

Keywords: crisis; complex system; heterogeneity; networks (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REOF_124_0015 (application/pdf)
http://www.cairn.info/revue-de-l-ofce-2012-5-page-15.htm (text/html)
free

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cai:reofsp:reof_124_0015

Access Statistics for this article

More articles in Revue de l'OFCE from Presses de Sciences-Po
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().