Rediscovering the Economics of Keynes in an Agent-Based Computational Setting

Charlotte Bruun ()

New Mathematics and Natural Computation (NMNC), 2016, vol. 12, issue 02, 77-96

Abstract: The aim of this paper is to use agent-based computational economics to explore the economic thinking of Keynes. Taking his starting point at the macroeconomic level, Keynes argued that economic systems are characterized by fundamental uncertainty — an uncertainty that makes rule-based behavior and reliance on monetary magnitudes more optimal to the economic agent than profit — and utility optimization in the traditional sense. Unfortunately, more systematic studies of the properties of such a system were not possible at the time of Keynes. However, the system envisioned by Keynes holds a lot of properties in common with what we today call complex dynamic systems, and we may apply the method of agent-based computational economics to his ideas. The presented agent-based Keynesian model demonstrates, as argued by Keynes, that the economy can self-organize without relying on price movement as an equilibrating factor. In our implementation, self-organization, however, does not mean a steady long run equilibrium but a tendency to generate cycles.

Keywords: Agent-based computational economics; Keynes (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1793005716500071
Access to full text is restricted to subscribers

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:wsi:nmncxx:v:12:y:2016:i:02:n:s1793005716500071

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1793005716500071

Access Statistics for this article

New Mathematics and Natural Computation (NMNC) is currently edited by Paul P Wang

More articles in New Mathematics and Natural Computation (NMNC) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().