A Keynes-Kalecki Model of Cyclical Growth with Agent-Based Features
AbstractThroughout his career, Malcolm Sawyer has both encouraged and contributed to the development of a Kaleckian alternative to conventional macroeconomic theory. In the spirit of this endeavour, we construct a Keynes-Kalecki model of cyclical growth with agent-based features. Our model is driven by heterogeneous firms who, confronting an environment of fundamental uncertainty, revise their “state of long run expectations” in response to recent events. Model simulations generate fluctuations in the rate of growth that are aperiodic and of variable amplitude. We also study the size distribution of firms resulting from our simulations, finding evidence of a power law distribution that we have no reason to anticipate from the basic structure of our model. Finally, we reflect on the potential advantages of combining aggregate structural modelling with some of the methods and practices of agent-based computational economics.
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Bibliographic InfoPaper provided by Trinity College, Department of Economics in its series Working Papers with number 1008.
Length: 35 pages
Date of creation: Sep 2010
Date of revision:
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Web page: http://www.trincoll.edu/Academics/MajorsAndMinors/Economics/Pages/default.aspx
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Kaleckian model; growth; cycles; agent-based computational economics;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-CMP-2010-10-02 (Computational Economics)
- NEP-FDG-2010-10-02 (Financial Development & Growth)
- NEP-MAC-2010-10-02 (Macroeconomics)
- NEP-PKE-2010-10-02 (Post Keynesian Economics)
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- Mark Setterfield & Bill Gibson, 2013. "Real and financial crises," Working Papers 1309, Trinity College, Department of Economics, revised Sep 2013.
- Mark Setterfield & Yun Kim, 2013. "Debt Servicing, Aggregate Consumption, and Growth," Working Papers 1316, Trinity College, Department of Economics.
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