Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67945
Authors: 
Chen, Shu-Heng
Chang, Chia-Ling
Wen, Ming-Chang
Year of Publication: 
2013
Series/Report no.: 
Economics Discussion Papers 2013-4
Abstract: 
We construct an agent-based New Keynesian DSGE model with different social network structures to investigate the significance of network topologies to macroeconomic stability. According to our simulation results, we find that the more liquid the information flow, the higher the stability of the economy. Furthermore, the speed of information dissemination and the degree of clustering among agents may give rise to an adverse effect on economic stability. Finally, we find that the scale-free network will lead to the most dramatic economic fluctuations. The result is ascribed to the scale-free network's high centrality. It indicates that the opinion leaders may bring about a conglomerate effect that will cause fluctuations in the economy.
Subjects: 
New Keynesian DSGE models
macroeconomic stability
social networks
Information dissemination
herding effect
agent-based model
JEL: 
D84
E12
C63
E3
E32
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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