The Agent‐based Approach to Post Keynesian Macro‐modeling

Abstract

The paper presents a survey of Post Keynesian (PK) agent‐based (AB) models and AB models with PK features. It is argued that AB modeling is fully consistent with the PK approach and that the cross‐fertilization can benefit both areas of research. The survey focuses on how the various models have faced the issues implied by adopting a bottom–up approach in a traditionally aggregative structure and highlights the additional insights coming from this modeling strategy. Particular attention is devoted to stock‐flow consistent AB models for theivvr potential in defining a new benchmark for this type of research.

Building a Macroeconomic Simulator with Multi-Layered Supplier–Customer Relationships

“…The term agent-based computational economics (ACE) is commonly used to describe macroeconomic research that uses ABMs. According to Brancacciom et al (2021) and Di Guilmi (2017), research utilizing ACE from the perspective of post-Keynesian economics has been conducted, particularly by combining the ABM with the stock-flow consistent (SFC) model Godley and Lavoie (2007). The SFC model comprehensively and completely integrates the real and financial aspects of the economy through the adoption of strict accounting rules based on the quadruple-entry principle developed by Copeland (1949).…”

Neoclassical influences in agent‐based literature: A systematic review

“…The 2008 "Great Recession" (IMF, 2012) has challenged the mainstream approach (Buiter, 2009;Mankiw, 2006;Romer, 2016;Solow, 2008Solow, , 2010Stiglitz, 2011;Trichet, 2010) and has led to a surge of interest in alternative lines of research (Blanchard & Brancaccio, 2019). Notably, a growing body of literature has stemmed from the cross-fertilization of AB modeling and heterodox economics (Di Guilmi, 2017).…”

“…In recent years, further contributions have resulted from an overlap between the AB modeling approaches and the Post-Keynesian Stock-Flow Consistent (SFC) models (Caverzasi & Russo, 2018;Di Guilmi, 2017). In their pioneering work, Caiani et al (2016) note that most AB models, are not SFC and thus show an accounting inconsistency likely to affect the patterns of consumption, investment, savings, credit, and other macroeconomic variables.…”

Inequality-constrained monetary policy in a financialized economy

“…Credit booms 1 An incomplete and tentative list of macro ABMs is: Delli Gatti et al (2003), Russo et al (2007), Deissenberg et al (2008), Dosi et al (2010), Riccetti et al (2015), Caiani et al (2016). For interested readers, we suggest two comprehensive review papers: Di Guilmi (2017) and Dawid and Delli Gatti (2018) 2 Karl Marx, Wage, Labor, and Capital, 1847.…”