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Heterogeneous Enterprises in a Macroeconomic Agent-Based Model

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  • Cornelia Metzig
  • Mirta Gordon
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    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.

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    File URL: http://arxiv.org/pdf/1211.5575
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    Bibliographic Info

    Paper provided by arXiv.org in its series Papers with number 1211.5575.

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    Date of creation: Nov 2012
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    Handle: RePEc:arx:papers:1211.5575

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    1. Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 4(31), pages 1-32.
    2. Bruun, Charlotte & Heyn-Johnsen, Carsten, 2009. "The paradox of monetary profits: an obstacle to understanding financial and economic Crisis?," Economics Discussion Papers 2009-52, Kiel Institute for the World Economy.
    3. Giulio Bottazzi & Angelo Secchi, 2005. "Explaining the Distribution of Firms Growth Rates," LEM Papers Series 2005/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Pascal Seppecher, 2009. "Un modèle macroéconomique multi-agents avec monnaie endogène," Working Papers halshs-00370716, HAL.
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