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Title:Agent-based macroeconomics - a baseline model PDF Logo
Authors:Lengnick, Matthias
Issue Date:2011
Series/Report no.:Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2011,04
Abstract:This paper develops a baseline agent-based macroeconomic model and contrasts it with the common dynamic stochastic general equilibrium approach. Although simple, the model can reproduce a lot of the stylized facts of business cycles. The author argues that agent-based modeling is an adequate response to the recently expressed criticism of macroeconomic methodology. It does not depend on the strict assumption of rationality and allows for aggregate behavior that is more than simply a replication of microeconomic optimization decisions. At the same time it allows for absolutely consistent micro foundations. Most importantly, it does not depend on equilibrium assumptions or fictitious auctioneers and does therefore not rule out coordination failures, instability and crisis by definition.
Subjects:agent-based modeling
complex adaptive systems
microfoundations of macroeconomics
JEL:B4
E1
E50
Document Type:Working Paper
Appears in Collections:Economics Working Papers, Department of Economics, CAU Kiel

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