Technology Shocks and Trade in a Network

Davoud Taghawi-Nejad ()
Additional contact information
Davoud Taghawi-Nejad: Department of Economics “S. Cognetti de Martiis”

A chapter in Progress in Artificial Economics, 2010, pp 101-112 from Springer

Abstract: Abstract In this paper we show how business cycles can emerge from the interaction of autonomous agents. We devised an agent-based computational microeconomics model of agents who trade in a network of trading partners. We assume that agents who observe decreased profits change their trading partners. At fixed intervals a new production technology becomes available to a single agent. If an agent introduces a new technology he changes his trading pattern and some of his trade partners can have a decrease in profits. The agents who have lower profits start changing trading partners. The change in the trading network can lead to lower production and decreased profits of other agents. Agents with decreased profits also start changing trade partners. In short, the technology shock triggers a snowball effect of agents changing their trading partners; the GDP decreases. When agents find new trading partners and regain their profits the GDP increases. A business cycle emerges.

Keywords: Business Cycle; Trading Partner; Autonomous Agent; Bilateral Trade; Cyclical Pattern (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:lnechp:978-3-642-13947-5_9

Ordering information: This item can be ordered from
http://www.springer.com/9783642139475

DOI: 10.1007/978-3-642-13947-5_9

Access Statistics for this chapter

More chapters in Lecture Notes in Economics and Mathematical Systems from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().