Advanced Search
MyIDEAS: Login to save this paper or follow this series

An agent-based "proof of principle" for Walrasian macroeconomic theory

Contents:

Author Info

  • Edoardo Gaffeo

    ()

  • Mauro Gallegati
  • Umberto Gostoli

Abstract

Macroeconomic models are typically solved through the imposition of a top-down general equilibrium solution constraining agents' rational be- havior. This is customarily obtained by recurring, explicitly or not, to the Walrasian auctioneer (WA) artifice. In this paper we aim at contributing to the small but burgeoning literature that deals with the consequences of removing it from the start by means of agent-based techniques. We let the textbook full-employment neoclassical macroeconomic model be populated by a large number of bounded-rational, autonomous agents, who are repeatedly engaged in decentralized transactions in interrelated markets. We set up a computational laboratory to perform several exper- iments, whose designs di¤er as regards the way we treat learning on the one side, and the institutional arrangement determining who - between firms and workers - is bound to bear the risk associated to incomplete markets on the other one. We show that our fully decentralized multi- market system admits the possibility to attain the WA full-employment solution, but also that serious coordination failures emerge endogenously as learning mechanisms and institutional settings are varied.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-ceel.economia.unitn.it/papers/papero12_02.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia in its series CEEL Working Papers with number 1202.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:trn:utwpce:1202

Contact details of provider:
Postal: Via Inama 5, 38100 Trento
Phone: +39-461-882201
Fax: +39-461-882222
Web page: http://www-ceel.economia.unitn.it
More information through EDIRC

Related research

Keywords: Agent-based computational economics; Decentralized exchange process; Microfoundations of macroeconomics;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. David Colander & Hans Föllmer & Armin Haas & Michael Goldberg & Katarina Juselius & Alan Kirman & Thomas Lux & Brigitte Sloth, 2009. "The Financial Crisis and the Systemic Failure of Academic Economics," Middlebury College Working Paper Series 0901, Middlebury College, Department of Economics.
  2. Vriend, Nicolaas J., 2000. "An illustration of the essential difference between individual and social learning, and its consequences for computational analyses," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 1-19, January.
  3. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics In Retrospect," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1411-1439, November.
  4. Quamrul Ashraf & Boris Gershman & Peter Howitt, 2013. "How Inflation Affects Macroeconomic Performance: An Agent-Based Computational Investigation," Working Papers 2013-10, American University, Department of Economics.
  5. M. Woodford., 2010. "Convergence in Macroeconomics: Elements of the New Synthesis," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 10.
  6. Douglas D. Davis & Charles A. Holt, 1996. "Markets with posted prices: recent results from the laboratory," Investigaciones Economicas, Fundación SEPI, vol. 20(3), pages 291-320, September.
  7. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-26, October.
  8. Smith, Vernon L, 1982. "Microeconomic Systems as an Experimental Science," American Economic Review, American Economic Association, vol. 72(5), pages 923-55, December.
  9. Bosch, A. & Sunder, S., 1994. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," GSIA Working Papers 1994-11, Carnegie Mellon University, Tepper School of Business.
  10. David Colander & Peter Howitt & Alan Kirman & Axel Leijonhufvud & Perry Mehrling, 2008. "Beyond DSGE Models: Toward an Empirically Based Macroeconomics," American Economic Review, American Economic Association, vol. 98(2), pages 236-40, May.
  11. Dosi, Giovanni & Fagiolo, Giorgio & Roventini, Andrea, 2010. "Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1748-1767, September.
  12. Edmund S. Phelps, 2007. "Macroeconomics for a Modern Economy," American Economic Review, American Economic Association, vol. 97(3), pages 543-561, June.
  13. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
  14. Noussair, Charles & Plott, Charles & Riezman, Raymond, 2007. "Production, trade, prices, exchange rates and equilibration in large experimental economies," European Economic Review, Elsevier, vol. 51(1), pages 49-76, January.
  15. Luis R. Izquierdo & Segismundo S. Izquierdo & José Manuel Galán & Jos� Ignacio Santos, 2009. "Techniques to Understand Computer Simulations: Markov Chain Analysis," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(1), pages 6.
  16. Herbert Gintis, 2007. "The Dynamics of General Equilibrium," Economic Journal, Royal Economic Society, vol. 117(523), pages 1280-1309, October.
  17. Ed Hopkins & Roberty M. Seymour, 2002. "The Stability of Price Dispersion under Seller and Consumer Learning," Game Theory and Information 0203002, EconWPA.
  18. Rob Axtell, 1999. "The Complexity of Exchange," Computing in Economics and Finance 1999 211, Society for Computational Economics.
  19. Olivier J. Blanchard, 2008. "The State of Macro," NBER Working Papers 14259, National Bureau of Economic Research, Inc.
  20. Howitt, Peter, 2012. "What have central bankers learned from modern macroeconomic theory?," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 11-22.
  21. Weintraub, E Roy, 1977. "The Microfoundations of Macroeconomics: A Critical Survey," Journal of Economic Literature, American Economic Association, vol. 15(1), pages 1-23, March.
  22. Saari, Donald G, 1985. "Iterative Price Mechanisms," Econometrica, Econometric Society, vol. 53(5), pages 1117-31, September.
  23. Edmund S. Phelps, 1968. "Money-Wage Dynamics and Labor-Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 76, pages 678.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mellár, Tamás & Hau, Orsolya & Sebestyén, Tamás, 2013. "Láthatóvá tehető-e a láthatatlan kéz? Egy ágensalapú piaci modell tapasztalatai
    [Can the invisible hand be rendered visible? Experiences of an agent-based market model]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 992-1024.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:trn:utwpce:1202. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marco Tecilla).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.