An Agent-Based Macroeconomic Model with Endogenous Intertemporal Decision Rules

Adalbert Mayer ()

Eastern Economic Journal, 2022, vol. 48, issue 4, No 4, 548-579

Abstract: Abstract This paper uses an evolutionary algorithm to create endogenous intertemporal decision rules in an agent-based macroeconomic model. This approach addresses the Lucas critique in an agent-based model and links agent-based macroeconomic modeling to the standard DSGE framework. It can replicate the intertemporal decision rules given by the rational expectations solution to a representative agent growth model; at the same time, it is possible to model alternative information sets used to form the intertemporal decision rules. The dynamics in response to shocks depend in a non-trivial way on the interplay of expectations formation and the microstructure of the interaction between individual agents.

Keywords: Agent-based macroeconomics; Evolutionary algorithm; Expectations formation (search for similar items in EconPapers)
JEL-codes: C60 E17 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pal:easeco:v:48:y:2022:i:4:d:10.1057_s41302-022-00221-2

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DOI: 10.1057/s41302-022-00221-2

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