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Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles >
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http://hdl.handle.net/10419/27538
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| Title: | | Implicit Microfoundations for Macroeconomics  |
| Authors: | | Wright, Ian |
| Issue Date: | | 2009 |
| Citation: | | [Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 3 [Issue:] 2009-19 [Pages:] 1-27 [DOI/URN:] doi:10.5018/economics-ejournal.ja.2009-19 |
| Series/Report no.: | | economics - The Open-Access, Open-Assessment E-Journal 2009-19 |
| Abstract: | | A large market economy has a huge number of degrees of freedom with weak microlevel coordination. The 'implicit microfoundations' approach considers this property of micro-level interactions to more strongly determine macro-level outcomes compared to the precise details of individual choice behavior; that is, the 'particle' nature of individuals dominates their 'mechanical' nature. So rather than taking an 'explicit microfoundations' approach, in which individuals are represented as 'white-box' sources of fully-specified optimizing behavior ('rational agents'), we instead represent individuals as 'black box' sources of unpredictable noise subject to objective constraints ('zero-intelligence agents'). To illustrate the potential of the approach we examine a parsimonious, agent-based macroeconomic model with implicit microfoundations. It generates many of the reported empirical distributions of capitalist economies, including the distribution of income, firm sizes, firm growth, GDP and recessions. |
| Subjects: | | Microfoundations macroeconomics aggregation power laws |
| JEL: | | A12 B41 C63 D50 E11 P16 |
| Persistent Identifier of the first edition: | | doi:10.5018/economics-ejournal.ja.2009-19 |
| URL of the first edition: | | http://www.economics-ejournal.org/economics/journalarticles/2009-19 |
| Creative Commons License: | |  |
| Document Type: | | Article |
| Appears in Collections: | | Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles
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