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Drawing on different disciplines: macroeconomic agent-based models

  • Andrew G. Haldane
  • Arthur E. Turrell
Regular Article
  • 233 Downloads

Abstract

Macroeconomic modelling has been under intense scrutiny since the Great Financial Crisis, when serious shortcomings were exposed in the methodology used to understand the economy as a whole. Criticism has been levelled at the assumptions employed in the dominant models, particularly that economic agents are homogenous and optimising and that the economy is equilibrating. In a related paper (Haldane and Turrell Oxford Rev Econ Polic 34(1–2):219–251 2018), we argue that an interdisciplinary approach to modelling in macroeconomics is beneficial. Here we focus on what one such approach - agent-based modelling, which has been extensively used across a wide range of disciplines - could do for macroeconomics. Agent-based models are complementary to existing approaches to macroeconomics and are particularly well-suited to answering questions where complexity, heterogeneity, networks, and heuristics play an important role.

Keywords

Macroeconomics Modelling Agent-based 

JEL Classification

A12 B22 B40 C63 

Notes

Acknowledgements

We are grateful to attendees of a seminar at the University of Oxford, to an anonymous referee, and to John Barrdear, James Barker, David Bholat, Shiv Chowla, Giovanni Dosi, Jeremy Franklin, Simon Hayes, Sujit Kapadia, Francesca Monti, Mauro Napoletano, Paul Robinson and Andrea Roventini for their help and comments.

Compliance with Ethical Standards

Conflict of Interest

The authors declare that they have no conflict of interest.

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© Bank of England 2018

Authors and Affiliations

  1. 1.Bank of EnglandLondonUK

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