Production and Finance in EURACE

  • Sander van der Hoog
  • Christophe Deissenberg
  • Herbert Dawid
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 614)


EURACE is a major FP6 STREP project aiming at constructing an exhaustive agent-based model of the European economy, populated by a very large number of sophisticated, autonomous agents. The EURACE model, which has an explicit spatial structure, includes all the major markets considered in quantitative macroeconomic modelling (consumer goods, investment goods, labour, credit and finance). It offers a unique opportunity for studying, from a new perspective, the empirically observed but theoretically poorly understood link between the real and the financial sphere of a modern economy. After summarily presenting the main features of EURACE, this paper describes in more detail the newly developed financial management module that intermediates between the real and the financial spheres in EURACE. In a nutshell, this module defines the link between the hiring and investment behavior of the firms as a function of the revenues they obtain by selling their products, of the money they can raise on the credit and financial markets, of their dividend policy, and other major aspects of financial decision-making.


Balance Sheet Operating Cycle Credit Market Investment Good Cash Holding 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. F. Allen and R. Michaely. Corporate finance: Handbook of the Economics of Finance, chapter Payout policy, pages 337-429. Amsterdam: North-Holland, 2004.Google Scholar
  2. A. Brav, J. R. Graham, C. R. Harvey, and R. Michaely. Payout policy in the 21st century. Journal of Financial Economics, 77(3):483-527, 2005.CrossRefGoogle Scholar
  3. S. Coakley, R. Smallwood, and M. Holcombe. From molecules to insect communities - how formal agent-based computational modelling is uncovering new biological facts. Scientiae Mathematicae Japonicae Online, e-2006:765-778, 2006.Google Scholar
  4. R. M. Cyert and J. G. March. A Behavioral Theory of the Firm. Blackwell, 1963/92.Google Scholar
  5. H. Dawid, S. Gemkow, P. Harting, K. Kabus, M. Neugart, and K. Wersching. Agent-based Models of Skill Dynamics and Innovation. EURACE Report D7.1, Bielefeld University, 2007.Google Scholar
  6. C. Deissenberg, S. van der Hoog, and H. Dawid. EURACE: A Massively Parallel Agent-Based Model of the European Economy. Applied Mathematics and Computation, forthcoming.Google Scholar
  7. M. Gallegati, M. Richiardi, and F. Clementi. Agent-Based Models of Goods, Labour and Credit Markets. EURACE Report D5.1. Department of Economics, Universit à Politecnica delle Marche., 2007.Google Scholar
  8. G. Laycock. The Theory and Practice of Specification Based Software Testing. PhD thesis, University of Sheffield, Dept. of Computer Science, 1993.Google Scholar
  9. S. C. Myers. The capital structure puzzle. Journal of Finance, 39(3):575-592, 1984.CrossRefGoogle Scholar
  10. J. Tirole. The Theory of Corporate Finance. Princeton University Press, 2006.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2008

Authors and Affiliations

  • Sander van der Hoog
    • 1
  • Christophe Deissenberg
    • 1
  • Herbert Dawid
    • 2
  1. 1.Université de la Méditerranée II and GREQAM, Château LafargeLes MillesFrance
  2. 2.Dept. of Business Administration and EconomicsBielefeld UniversityBielefeldGermany

Personalised recommendations