Evolution of sunspot like behavior in the agent based economies of bank runs

Arifovic, Jasmina

doi:10.1007/s00191-018-0598-9

Cited by 5 publications

(1 citation statement)

References 21 publications

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“…In presence of changing strategies, learning does not always stabilize the system. Indeed, as shown by Arifovic (2019) in an agent-based version of the Diamond-Dybvig model, when heterogenous agents adapt according to individual evolutionary algorithms, higher level of strategic uncertainty can lead to the emergence of sunspot bank-run equilibria. The simulated results generated by the ABM are indeed well in tune with experimental evidence on the interactions among human subjects.…”

Section: Macroeconomic Agent-based Modelsmentioning

confidence: 99%

More is different ... and complex! the case for agent-based macroeconomics

2019

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This work nests the Agent-Based macroeconomic perspective into the earlier history of macroeconomics. We discuss how the discipline in the 70's took a perverse path relying on models grounded on fictitious rational representative agent in order to try to pathetically circumvent aggregation and coordination problems. The Great Recession was a natural experiment for macroeconomics, showing the inadequacy of the predominant theoretical framework grounded on DSGE models. After discussing the pathological fallacies of the DSGE-based approach, we claim that macroeconomics should consider the economy as a complex evolving system, i.e. as an ecology populated by heterogenous agents, whose far-from-equilibrium interactions continuously change the structure of the system. This in turn implies that more is different: macroeconomics cannot be shrink to representative-agent micro, but agents' complex interactions lead to emergence of new phenomena and hierarchical structure at the macro level. This is what is taken into account by agent-based models, which provide a novel way to model complex economies from the bottom-up, with sound empirically-based microfoundations. We present the foundations of Agent-Based macroeconomics and we discuss how the contributions of this special issue push its frontier forward. Finally, we conclude by discussing the ways ahead for the fully acknowledgement of agent-based models as the standard way of theorizing in macroeconomics.

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Section: Macroeconomic Agent-based Modelsmentioning

confidence: 99%