Price Dynamics, financial fragility and aggregate volatility

Antoine Mandel, Simone Landini (), Mauro Gallegati and Herbert Gintis
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Simone Landini: Socioeconomic Research Institute of Piedmont - Socioeconomic Research Institute of Piedmont

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Abstract: Within a standard framework à la Arrow-Debreu, we investigate the dynamics emerging from the interactions of heterogeneous households and firms that are adaptive price setters and financially constrained. We show that depending on the stringency of the financial constraints the model can settle in two very different regimes: one characterized by equilibrium, the other by disequilibrium and financial fragility. We then investigate how the structure of the production network affects the emergence of aggregate volatility from micro-level price and financial shocks, hence providing a dynamical counterpart to recent results of Acemoglu and al (2012).

Keywords: Agent-based modeling; financial fragility; price dynamics; general equilibrium; production networks; Modélisation multi-agents; fragilité financière; dynamique des prix; équilibre général (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-cmp and nep-mac
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00917892v1
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Citations: View citations in EconPapers (2)

Published in 2013

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Related works:
Journal Article: Price dynamics, financial fragility and aggregate volatility (2015)
Working Paper: Price dynamics, financial fragility and aggregate volatility (2015)
Working Paper: Price dynamics, financial fragility and aggregate volatility (2015)
Working Paper: Price dynamics, financial fragility and aggregate volatility (2015)
Working Paper: Price Dynamics, financial fragility and aggregate volatility (2013)
Working Paper: Price dynamics, financial fragility and aggregate volatility (2013)
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