E Pluribus Unum: Macroeconomic modelling for multi-agent economies

Tiziana Assenza and Domenico Delli Gatti

Journal of Economic Dynamics and Control, 2013, vol. 37, issue 8, 1659-1682

Abstract: From the macroeconomist's viewpoint, agent based modelling has an obvious drawback: it makes impossible to think in aggregate terms. The modeller, in fact, can reconstruct aggregate variables only “from the bottom up” by summing the levels of a myriad of individual variables. We propose a modelling strategy which reduces the dimensionality of an agent based framework by replacing the actual distribution with the first and higher moments of the distribution itself. We put this strategy at work in a Macroeconomic and Agent Based Model (M&ABM) of the financial accelerator in which firms' heterogeneous degrees of financial robustness affect investment in a Greenwald-Stiglitz setting.

Keywords: Financial fragility; Heterogeneity; Stochastic aggregation; Business fluctuations (search for similar items in EconPapers)
JEL-codes: E32 E43 E44 E52 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: E Pluribus Unum: Macroeconomic Modelling for Multi-agent Economies (2012)
Working Paper: E Pluribus Unum: Macroeconomic Modelling for Multi-agent Economies (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:37:y:2013:i:8:p:1659-1682

DOI: 10.1016/j.jedc.2013.04.010

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