A short walk on the wild side : agent based models and their implications for macroeconomic analysis

Mauro Napoletano (1)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

This article discusses recent advances in agent-based modelling applied to macroeconomic analysis. I first introduce the building blocks of agent-based models. Furthermore, by relying on examples taken from recent works, I argue that that agent-based models may provide complementary or new lights with respect to more standard models on key macroeconomic issues like endogenous business cycles, the interactions between business cycles and long-run growth, and the role of price vs. quantity adjustments in the return to full employment. Finally, I discuss some limits of agent-based models and how they are currently addressed in the literature.

Keywords: Agent based models; Macroeconomic analysis; Endogenous business cycles; Short and long run dynamics; Monetary and fiscal policies; Price vs quantity adjustments

Domains: Humanities and Social Sciences; Economics and Finance

Mauro Napoletano. A short walk on the wild side : agent based models and their implications for macroeconomic analysis. Revue de l'OFCE, 2018, Whither the Economy?, 3 (157), pp.257 - 281. ⟨10.3917/reof.157.0257⟩. ⟨hal-03443471⟩