Chapter

Computational Methods in Economic Dynamics

Volume 13 of the series Dynamic Modeling and Econometrics in Economics and Finance pp 159-181

Energy Shocks and Macroeconomic Stabilization Policies in an Agent-Based Macro Model

  • Sander van der HoogAffiliated withDept. of Business Administration and Economics, Bielefeld University Email author 
  • , Christophe DeissenbergAffiliated withGREQAM, Universitée de la Méditerranée II

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Abstract

In this chapter we consider the effects of exogenous energy shocks on an agent-based macroeconomic system and study the out-of-equilibrium dynamics. We introduce automatic stabilizers that allow the artificial economy to absorbe the shocks. Two types of macroeconomic stabilization policies are implemented: a consumer subsidy scheme that compensates households for their loss in purchasing power, and a tax reduction scheme that affects both households and firms to support consumption and investments. Policy experiments are then carried out to evaluate the effectiveness of these macroeconomic policies. Finally, we are able to distinguish between short- and long-term effects of the policy measures.