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POSA: Policy implementation sensitivity analysis

Tom Bauermann, Michael W. M. Roos and Frederik Schaff

No 854, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Agent-based computational economics (ACE) is gaining interest in macroeconomic research. Agent-based models (ABM) are increasingly able to replicate micro- and macroeconomic stylised facts and to extend the knowledge about real-world economic systems. These advances allow ABM to become a valuable and more frequently used tool for policy analysis in academia and economic practice. However, ACE is a rather complex approach to already complex investigations like policy analyses, i.e. the analyses on how a variety of policy measures affects the (model) economy, which makes policy analyses in ABM prone to critique. The following research paper addresses these problems. We have developed a procedure for policy experiments in ACE which helps to conceptualise and conduct policy experiments in macroeconomic ABM efficiently. The procedure makes policy implementation decisions and their consequences transparent by conducting what we term the policy implementation sensitivity analysis (POSA). The application of the procedure produces graphical and/or numerical reports that should be included in the appendix of the original research paper in order to increase the credibility of the research, similar to proofs and protocols in analytical and empirical research.

Keywords: agent-based macroeconomics; policy experiments; sensitivity analyses (search for similar items in EconPapers)
JEL-codes: B4 C63 E6 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cmp, nep-mac and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:854

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