Rethinking macroeconomics with endogenous market structure
- New York Cambridge University Press 2019
- xix, 230 p.
Table of Contents Introduction Part I. Theory: 1. Industrial structure and the macroeconomy: a few premises for a macromodel 2. Industrial structure and the macroeconomy: the macroeconomic model and its algebraic framework Part II. Model: 3. A computable market model: the structure of the agent-based simulation 4. The results of the simulation agent-based model 5. The model facing empirical data Conclusions Appendices: Appendix A. The structure of an atomistic simplified Hayekian market Appendix B. The acrostics of the simulation model and its parameters References Biographical notes.
The birth and death of firms is one of the main features of the business cycle. Yet mainstream DGSE macroeconomic models mostly ignore this phenomenon, thereby excluding any potential impact of economic policy on the probability of the birth and death of firms. Those DGSE models that do allow for this phenomenon do so at the cost of drastic simplifications, which effectively rule out causal links between the strategic interaction of industrial firms and the macroeconomy. This innovative new book develops a bottom-up, agent-based framework that shows how strategic interactions at the level of oligopolistic firms, and even at the level of individuals, affect entire industrial sectors and the equilibrium of the macroeconomy. It will appeal to academic researchers and graduate students working in computational economics, agent-based modelling and econophysics, as well as mainstream economists interested in learning more about alternatives to DGSE models in macroeconomics.
Provides a new theoretical framework that accounts for the macroeconomic effects of strategic interactions among oligopolistic firms Contains both accessible, non-technical descriptions as well as more technical sections with detailed algebraic explanations of both the theoretical model and the simulation Authored by three of the leading academics in agent-based economics