Emergent Dynamics of a Macroeconomic Agent Based Model with Capital and Credit

Tiziana Assenza, Domenico Delli Gatti and Jakob Grazzini

No 4765, CESifo Working Paper Series from CESifo

Abstract: Building on the framework put forward by Delli Gatti et al. 2011, in this paper we present and discuss a Macroeconomic Agent-Based Model with Capital and Credit (hereafter CC-MABM). The novelty of this model with respect to the previous framework consists in the introduction of capital goods that firms producing consumption goods (C-firms) purchase from capital goods producers (K-firms). The introduction of durability (in the form of capital which depreciates gradually) has important consequences for the emergent macrodynamic behavior. The present CC-MABM is essentially a two-sector macro ABM. In a stylized supply chain the upstream sector, consisting of firms producing capital goods (K-firms) supply a durable and sticky input (capital) to the downstream sector consisting of firms producing consumption goods (C-firms) to be sold to households. Both C-firms and K-firms resort to bank loans to satisfy their financing needs. There are two-ways feedbacks between markets and sectors which yield interesting emerging properties at the macro level.

Keywords: agent-based macroeconomics; capital; credit; crisis; upstream; down-stream (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2014
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Journal Article: Emergent dynamics of a macroeconomic agent based model with capital and credit (2015)
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