Monetary and Fiscal Policy Analysis With an Agent-Based Macroeconomic Model

Unemployment Benefits and Financial Leverage in an Agent Based Macroeconomic Model

“…Indeed, when we consider that the economy is a complex system in which aggregate regularities (from meso to macro) emerge from the decentralized interaction of a multitude of autonomous agents, Heterogeneous Interacting Agents (HIA) constitutes an effective alternative to the Representative Agent (RA) hypothesis, which is instead the typical assumption made by mainstream macroeconomics (Stiglitz and Gallegati, 2011). Various authors proposed an agent based approach to the study of complex (macro)economic dynamics; just to make a few examples: Ashraf (Russo et al, 2007), the combination of Keynesian management of aggregate demand and Schumpeterian policies aimed at promoting technological progress (Dosi et al, 2010), the interplay between income distribution and economic policies , monetary and fiscal policies (Haber, 2008), the effectiveness of various stabilization policies (Westerhoff and Franke, 2012), labor market policies (Neugart, 2008), the role of regulatory policies on financial markets (Westerhoff, 2008), the effects of introducing a Tobin-like tax (Westerhoff and Dieci, 2006;Mannaro et al 2008;), and so on. Hence, agent based models represent an alternative formulation of microfoundations suited for a complex macroeconomic system and this different approach may have important implications for policy advice (Dawid and Neugart, 2011).…”

Transaction taxes, greed and risk aversion in an agent-based financial market model

“…2 The effectiveness of central bank interventions were analyzed with agent-based models in Westerhoff (2001Westerhoff ( , 2008 and Wieland and Westerhoff (2005). Weidlich and Veit (2008) use agent-based models for analyzing regulations in the electricity market, while Haber (2008) applies an agent-based model for monetary and fiscal policy analysis. Westerhoff (2003bWesterhoff ( , 2006Westerhoff ( , 2008 analyze the effectiveness of trading halts in financial markets.…”

Macroeconomic Policy in DSGE and Agent-Based Models Redux: New Developments and Challenges Ahead

“…On the contrary, when agents employ ordinary least square to form their forecasts, the individual and collective performance worsen as structural breaks and Knightian uncertainty cannot be taken into account. Relatedly, Haber (2008) studies the interactions between different expectation-formation mechanisms and fiscal and monetary policies in an agent-based model. He finds that the introduction of more sophisticated expectations reduce the effects of fiscal policy, whereas it increases the impact of monetary policy.…”