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The Future of Agent-Based Modeling

Abstract

In this paper, I elaborate on the role of agent-based (AB) modeling for macroeconomic research. My main tenet is that the full potential of the AB approach has not been realized yet. This potential lies in the modular nature of the models, which is bought by abandoning the straitjacket of rational expectations and embracing an evolutionary perspective. I envisage the foundation of a Modular Macroeconomic Science, where new models with heterogeneous interacting agents, endowed with partial information and limited computational ability, can be created by recombining and extending existing models in a unified computational framework.

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Acknowledgments

This paper has benefited from insightful discussions with Doyne Farmer, Dan Tang, David Pough, Christoph Aymanns, and other researchers at the Institute of New Economic Thinking at the Oxford Martin School. All errors or omissions are my sole responsibility.

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Correspondence to Matteo G. Richiardi.

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Richiardi, M.G. The Future of Agent-Based Modeling. Eastern Econ J 43, 271–287 (2017). https://doi.org/10.1057/s41302-016-0075-9

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  • DOI: https://doi.org/10.1057/s41302-016-0075-9

Keywords

  • agent-based
  • simulation
  • macroeconomics
  • modularity

JEL

  • B40
  • C63
  • E17