KEYNESIAN AND NEOCLASSICAL CLOSURES IN AN AGENT-BASED CONTEXT

William Gibson

UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics

Abstract: Since the "closure debate" of the 1980s it is well known that com- parative static derivatives in analytical macro models are highly sensitive to the closure rule selected. This led Keynesians to conclude that Keynesian closures were superior to those favored by the orthodoxy and vice-versa. It is argued that with the advent of agent-based or multi-agent systems, the clo- sure debate is superseded. While elements of both Keynesian and neoclassical models survive the transition to the more synthetic environment, an agent- based approach eliminates the need for drastic simplification that was at the root of the debate from the beginning.

Keywords: Agent-based models; multi-agent systems; macroeconomic closure. (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-cbe, nep-cmp, nep-mac and nep-pke
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Citations: View citations in EconPapers (1)

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