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Heterogeneous Enterprises in a Macroeconomic Agent-Based Model

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  • Cornelia Metzig
  • Mirta Gordon

Abstract

We present a macroeconomic agent-based model that combines several mechanisms operating at the same timescale, while remaining mathematically tractable. It comprises enterprises and workers who compete in a job market and a commodity goods market. The model is stock-flow consistent; a bank lends money charging interest rates, and keeps track of equities. Important features of the model are heterogeneity of enterprises, existence of bankruptcies and creation of new enterprises, as well as productivity increase. The model's evolution reproduces empirically found regularities for firm size and growth rate distributions. It combines probabilistic elements and deterministic dynamics, with relative weights that may be modified according to the considered problem or the belief of the modeler. We discuss statistical regularities on enterprises, the origin and the amplitude of endogeneous fluctuations of the system's steady state, as well as the role of the interest rate and the credit volume. We also summarize obtained results which are not discussed in detail in this paper.

Suggested Citation

  • Cornelia Metzig & Mirta Gordon, 2012. "Heterogeneous Enterprises in a Macroeconomic Agent-Based Model," Papers 1211.5575, arXiv.org.
    • Handle: RePEc:arx:papers:1211.5575
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    References listed on IDEAS

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    Cited by:

    1. Gualdi, Stanislao & Tarzia, Marco & Zamponi, Francesco & Bouchaud, Jean-Philippe, 2015. "Tipping points in macroeconomic agent-based models," Journal of Economic Dynamics and Control, Elsevier, vol. 50(C), pages 29-61.
    2. Williams, Michael A. & Baek, Grace & Park, Leslie Y. & Zhao, Wei, 2016. "Global evidence on the distribution of economic profit rates," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 458(C), pages 356-363.

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