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Reflections on Modern Macroeconomics: Can We Travel Along a Safer Road?

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  • E. Gaffeo
  • M. Catalano
  • F. Clementi
  • D. Delli Gatti
  • M. Gallegati
  • A. Russo

Abstract

In this paper we sketch some reflections on the pitfalls and inconsistencies of the research program - currently dominant among the profession - aimed at providing microfoundations to macroeconomics along a Walrasian perspective. We argue that such a methodological approach constitutes an unsatisfactory answer to a well-posed research question, and that alternative promising routes have been long mapped out but only recently explored. In particular, we discuss a recent agent-based, truly non-Walrasian macroeconomic model, and we use it to envisage new challenges for future research.

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File URL: http://arxiv.org/pdf/physics/0608148
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Paper provided by arXiv.org in its series Papers with number physics/0608148.

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Date of creation: Aug 2006
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Publication status: Published in Physica A: Statistical Mechanics and its Applications, Vol: 382, Issue: 1, 1 August 2007, pp: 89-97
Handle: RePEc:arx:papers:physics/0608148

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Cited by:
  1. Edoardo Gaffeo & Domenico Delli Gatti & Saul Desiderio & Mauro Gallegati, 2008. "Adaptive microfoundations for emergent macroeconomics," Department of Economics Working Papers, Department of Economics, University of Trento, Italia 0802, Department of Economics, University of Trento, Italia.
  2. Russo, Alberto & Riccetti, Luca & Gallegati, Mauro, 2013. "Increasing Inequality and Financial Fragility in an An Agent Based Macroeconomic Model," MPRA Paper 51528, University Library of Munich, Germany.
  3. Lengnick, Matthias, 2013. "Agent-based macroeconomics: A baseline model," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 86(C), pages 102-120.
  4. Pasquale Cirillo & Mauro Gallegati, 2012. "The Empirical Validation of an Agent-based Model," Eastern Economic Journal, Palgrave Macmillan, vol. 38(4), pages 525-547.
  5. Newton J. Moura Jr. & Marcelo B. Ribeiro, 2008. "Evidence for the Gompertz Curve in the Income Distribution of Brazil 1978-2005," Papers 0812.2664, arXiv.org.
  6. Wright, Ian, 2009. "Implicit Microfoundations for Macroeconomics," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 3(19), pages 1-27.
  7. Neveu, Andre R., 2013. "Fiscal policy and business cycle characteristics in a heterogeneous agent macro model," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 92(C), pages 224-240.

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