IDEAS home Printed from https://ideas.repec.org/a/bla/jecsur/v31y2017i5p1183-1203.html
   My bibliography  Save this article

The Agent†Based Approach To Post Keynesian Macro†Modeling

Author

Listed:
  • Corrado Di Guilmi

Abstract

The paper presents a survey of Post Keynesian (PK) agent†based (AB) models and AB models with PK features. It is argued that AB modeling is fully consistent with the PK approach and that the cross†fertilization can benefit both areas of research. The survey focuses on how the various models have faced the issues implied by adopting a bottom–up approach in a traditionally aggregative structure and highlights the additional insights coming from this modeling strategy. Particular attention is devoted to stock†flow consistent AB models for theivvr potential in defining a new benchmark for this type of research.

Suggested Citation

  • Corrado Di Guilmi, 2017. "The Agent†Based Approach To Post Keynesian Macro†Modeling," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1183-1203, December.
  • Handle: RePEc:bla:jecsur:v:31:y:2017:i:5:p:1183-1203
    DOI: 10.1111/joes.12244
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joes.12244
    Download Restriction: no

    File URL: https://libkey.io/10.1111/joes.12244?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Giovanni Dosi & Giorgio Fagiolo & Andrea Roventini, 2009. "The microfoundations of business cycles: an evolutionary, multi-agent model," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 161-180, Springer.
    2. Seppecher, Pascal, 2012. "Flexibility Of Wages And Macroeconomic Instability In An Agent-Based Computational Model With Endogenous Money," Macroeconomic Dynamics, Cambridge University Press, vol. 16(S2), pages 284-297, September.
    3. Paul De Grauwe, 2014. "Animal Spirits and Monetary Policy," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 18, pages 473-520, World Scientific Publishing Co. Pte. Ltd..
    4. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2017. "When more flexibility yields more fragility: The microfoundations of Keynesian aggregate unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 162-186.
    5. Foley Duncan K., 1994. "A Statistical Equilibrium Theory of Markets," Journal of Economic Theory, Elsevier, vol. 62(2), pages 321-345, April.
    6. Marc Lavoie, 2014. "Post-Keynesian Economics: New Foundations," Post-Print hal-01343652, HAL.
    7. Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Russo, Alberto & Stiglitz, Joseph E., 2010. "The financial accelerator in an evolving credit network," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1627-1650, September.
    8. Russo, Alberto & Catalano, Michele & Gaffeo, Edoardo & Gallegati, Mauro & Napoletano, Mauro, 2007. "Industrial dynamics, fiscal policy and R&D: Evidence from a computational experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 426-447.
    9. 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.
    10. David Colander & Peter Howitt & Alan Kirman & Axel Leijonhufvud & Perry Mehrling, 2018. "Beyond DSGE Models: Toward an Empirically Based Macroeconomics," Chapters, in: How Economics Should Be Done, chapter 14, pages 212-216, Edward Elgar Publishing.
    11. Lengnick, Matthias, 2013. "Agent-based macroeconomics: A baseline model," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 102-120.
    12. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea & Treibich, Tania, 2015. "Fiscal and monetary policies in complex evolving economies," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 166-189.
    13. Riccetti, Luca & Russo, Alberto & Gallegati, Mauro, 2013. "Leveraged network-based financial accelerator," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1626-1640.
    14. Harcourt, G. C. & Kriesler, Peter (ed.), 2013. "The Oxford Handbook of Post-Keynesian Economics, Volume 2: Critiques and Methodology," OUP Catalogue, Oxford University Press, number 9780195390759.
    15. Setterfield, Mark & Gouri Suresh, Shyam, 2016. "Multi-agent systems as a tool for analyzing path-dependent macrodynamics," Structural Change and Economic Dynamics, Elsevier, vol. 38(C), pages 25-37.
    16. J. E. King, 2015. "Advanced Introduction to Post Keynesian Economics," Books, Edward Elgar Publishing, number 15476.
    17. Caiani, Alessandro & Godin, Antoine & Caverzasi, Eugenio & Gallegati, Mauro & Kinsella, Stephen & Stiglitz, Joseph E., 2016. "Agent based-stock flow consistent macroeconomics: Towards a benchmark model," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 375-408.
    18. Bernanke, Ben & Gertler, Mark, 1989. "Agency Costs, Net Worth, and Business Fluctuations," American Economic Review, American Economic Association, vol. 79(1), pages 14-31, March.
    19. Shyam Gouri Suresh & Mark Setterfield, 2015. "Firm performance, macroeconomic conditions, and “animal spirits” in a Post Keynesian model of aggregate fluctuations," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(1), pages 38-63, July.
    20. Gustavo Gomes de Freitas & Gilberto Tadeu Lima, 2007. "Debt Financing And Emergent Dynamics Of A Financial Fitness Landscape," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 064, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    21. Jo Michell, 2014. "A Steindlian account of the distribution of corporate profits and leverage: A stock-flow consistent macroeconomic model with agent-based microfoundations," Working Papers PKWP1412, Post Keynesian Economics Society (PKES).
    22. Luca Riccetti & Alberto Russo & Mauro Gallegati, 2015. "An agent based decentralized matching macroeconomic model," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 10(2), pages 305-332, October.
    23. Roos, Michael W. M., 2015. "The macroeconomics of radical uncertainty," Ruhr Economic Papers 592, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    24. Chiarella, C. & Di Guilmi, C., 2017. "Monetary Policy And Debt Deflation: Some Computational Experiments," Macroeconomic Dynamics, Cambridge University Press, vol. 21(1), pages 214-242, January.
    25. Chiarella, Carl & Di Guilmi, Corrado, 2011. "The financial instability hypothesis: A stochastic microfoundation framework," Journal of Economic Dynamics and Control, Elsevier, vol. 35(8), pages 1151-1171, August.
    26. Bill Gibson & Mark Setterfield, 2018. "Intermediation, Money Creation, and Keynesian Macrodynamics in Multi-agent Systems," Review of Political Economy, Taylor & Francis Journals, vol. 30(2), pages 154-171, April.
    27. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea, 2013. "Income distribution, credit and fiscal policies in an agent-based Keynesian model," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1598-1625.
    28. Claudio H. Dos Santos, 2005. "A stock-flow consistent general framework for formal Minskyan analyses of closed economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 27(4), pages 712-735.
    29. Christopher D. Carroll, 2001. "A Theory of the Consumption Function, with and without Liquidity Constraints," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 23-45, Summer.
    30. Gatti, Domenico Delli & Guilmi, Corrado Di & Gaffeo, Edoardo & Giulioni, Gianfranco & Gallegati, Mauro & Palestrini, Antonio, 2005. "A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 489-512, April.
    31. Antoine Godin, 2015. "Special issue: Post-Keynesian stock-flow consistent modelling: Editorial to the special issue," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(1), pages 29-31, April.
    32. Eric Nasica, 2000. "Finance, Investment and Economic Fluctuations," Books, Edward Elgar Publishing, number 1564.
    33. Pascal Seppecher & Isabelle Salle, 2015. "Deleveraging crises and deep recessions: a behavioural approach," Applied Economics, Taylor & Francis Journals, vol. 47(34-35), pages 3771-3790, July.
    34. Marc Lavoie, 2022. "Post-Keynesian Economics," Books, Edward Elgar Publishing, number 19900.
    35. Christian Schoder, 2017. "A Critical Review of the Rationale Approach to the Microfoundation of Post-Keynesian Theory," Review of Political Economy, Taylor & Francis Journals, vol. 29(2), pages 171-189, April.
    36. Cristiano Perugini & Jens Hölscher & Simon Collie, 2016. "Inequality, credit and financial crises," Cambridge Journal of Economics, Oxford University Press, vol. 40(1), pages 227-257.
    37. Peter Skott, 2012. "Pluralism, the Lucas critique, and the integration of macro and micro," UMASS Amherst Economics Working Papers 2012-04, University of Massachusetts Amherst, Department of Economics.
    38. repec:hal:spmain:info:hdl:2441/9d007rc2q9huruni0kde2vr73 is not listed on IDEAS
    39. Eric Nasica, 2000. "Finance, Investment and Economic Fluctuations: An Analysis in the Tradition of Hyman P. Minsky," Post-Print halshs-00466527, HAL.
    40. Raberto, Marco & Teglio, Andrea & Cincotti, Silvano, 2012. "Debt, deleveraging and business cycles: An agent-based perspective," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-49.
    41. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea & Treibich, Tania, 2015. "Fiscal and monetary policies in complex evolving economies," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 166-189.
    42. Barry Z. Cynamon & Steven M. Fazzari, 2013. "Inequality and Household Finance during the Consumer Age," Economics Working Paper Archive wp_752, Levy Economics Institute.
    43. Alberto Russo & Luca Riccetti & Mauro Gallegati, 2016. "Increasing inequality, consumer credit and financial fragility in an agent based macroeconomic model," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 25-47, March.
    44. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea & Treibich, Tania, 2015. "Fiscal and monetary policies in complex evolving economies," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 166-189.
    45. Bruce C. Greenwald & Joseph E. Stiglitz, 1993. "Financial Market Imperfections and Business Cycles," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 77-114.
    46. Eichner, Alfred S & Kregel, J A, 1975. "An Essay on Post-Keynesian Theory: A New Paradigm in Economics," Journal of Economic Literature, American Economic Association, vol. 13(4), pages 1293-1314, December.
    47. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
    48. Joseph E Stiglitz & Mauro Gallegati, 2011. "Heterogeneous Interacting Agent Models for Understanding Monetary Economies," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(1), pages 6-12.
    49. Harcourt, Geoffrey & Kriesler, Peter (ed.), 2013. "The Oxford Handbook of Post-Keynesian Economics, Volume 1: Theory and Origins," OUP Catalogue, Oxford University Press, number 9780195390766.
    50. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea & Treibich, Tania, 2015. "Fiscal and monetary policies in complex evolving economies," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 166-189.
    51. Stephen Kinsella & Matthias Greiff & Edward J Nell, 2011. "Income Distribution in a Stock-Flow Consistent Model with Education and Technological Change," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(1), pages 134-149.
    52. Gatti, Domenico Delli & Di Guilmi, Corrado & Gallegati, Mauro & Giulioni, Gianfranco, 2007. "Financial Fragility, Industrial Dynamics, And Business Fluctuations In An Agent-Based Model," Macroeconomic Dynamics, Cambridge University Press, vol. 11(S1), pages 62-79, November.
    53. Duncan Foley, 2017. "Crisis and theoretical methods: equilibrium and disequilibrium once again," Working Papers 1703, New School for Social Research, Department of Economics.
    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


    Cited by:

    1. Ítalo Pedrosa & Dany Lang, 2018. "Heterogeneity, distribution and financial fragility of non-financial firms: an agent-based stock-flow consistent (AB-SFC) model," Working Papers hal-01937186, HAL.
    2. Fierro, Luca Eduardo & Giri, Federico & Russo, Alberto, 2022. "Inequality-Constrained Monetary Policy in a Financialized Economy," MPRA Paper 115741, University Library of Munich, Germany.
    3. Deborah Noguera & Gabriel Montes-Rojas, 2022. "Credit-constrained fluctuations and uncertainty in a network economy," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(80), pages 5-52, November.
    4. Kirill S. Glavatskiy & Mikhail Prokopenko & Adrian Carro & Paul Ormerod & Michael Harre, 2020. "Explaining herding and volatility in the cyclical price dynamics of urban housing markets using a large scale agent-based model," Papers 2004.07571, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giovanni Dosi & Andrea Roventini, 2017. "Agent-Based Macroeconomics and Classical Political Economy: Some Italian Roots," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(3), pages 261-283, November.
    2. Eugenio Caverzasi & Alberto Russo, 2018. "Toward a new microfounded macroeconomics in the wake of the crisis," Industrial and Corporate Change, Oxford University Press, vol. 27(6), pages 999-1014.
    3. Giorgio Fagiolo & Andrea Roventini, 2017. "Macroeconomic Policy in DSGE and Agent-Based Models Redux: New Developments and Challenges Ahead," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 20(1), pages 1-1.
    4. Popoyan, Lilit & Napoletano, Mauro & Roventini, Andrea, 2020. "Winter is possibly not coming: Mitigating financial instability in an agent-based model with interbank market," Journal of Economic Dynamics and Control, Elsevier, vol. 117(C).
    5. repec:hal:spmain:info:hdl:2441/dcditnq6282sbu1u151qe5p7f is not listed on IDEAS
    6. repec:hal:spmain:info:hdl:2441/1j4v8sl4fc9a49ankmnhv6bb6a is not listed on IDEAS
    7. Laura Carvalho & Corrado Di Guilmi, 2020. "Technological unemployment and income inequality: a stock-flow consistent agent-based approach," Journal of Evolutionary Economics, Springer, vol. 30(1), pages 39-73, January.
    8. Popoyan, Lilit & Napoletano, Mauro & Roventini, Andrea, 2017. "Taming macroeconomic instability: Monetary and macro-prudential policy interactions in an agent-based model," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 117-140.
    9. repec:hal:spmain:info:hdl:2441/5bnglqth5987gaq6dhju3psjn3 is not listed on IDEAS
    10. Caiani, Alessandro & Godin, Antoine & Caverzasi, Eugenio & Gallegati, Mauro & Kinsella, Stephen & Stiglitz, Joseph E., 2016. "Agent based-stock flow consistent macroeconomics: Towards a benchmark model," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 375-408.
    11. Alberto Russo, 2017. "An Agent Based Macroeconomic Model with Social Classes and Endogenous Crises," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(3), pages 285-306, November.
    12. Ítalo Pedrosa & Dany Lang, 2018. "Heterogeneity, distribution and financial fragility of non-financial firms: an agent-based stock-flow consistent (AB-SFC) model," Working Papers hal-01937186, HAL.
    13. repec:hal:spmain:info:hdl:2441/5hussro0tc951q0jqpu8quliqu is not listed on IDEAS
    14. Guerini, Mattia & Napoletano, Mauro & Roventini, Andrea, 2018. "No man is an Island: The impact of heterogeneity and local interactions on macroeconomic dynamics," Economic Modelling, Elsevier, vol. 68(C), pages 82-95.
    15. Guilmi, Corrado Di & Fujiwara, Yoshi, 2022. "Dual labor market, financial fragility, and deflation in an agent-based model of the Japanese macroeconomy," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 346-371.
    16. Emanuele Russo, 2021. "Harrodian instability in decentralized economies: an agent-based approach," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 539-567, July.
    17. Taberna, Alessandro & Filatova, Tatiana & Roventini, Andrea & Lamperti, Francesco, 2022. "Coping with increasing tides: Evolving agglomeration dynamics and technological change under exacerbating hazards," Ecological Economics, Elsevier, vol. 202(C).
    18. Guerini, Mattia & Napoletano, Mauro & Roventini, Andrea, 2018. "No man is an Island: The impact of heterogeneity and local interactions on macroeconomic dynamics," Economic Modelling, Elsevier, vol. 68(C), pages 82-95.
    19. Gräbner-Radkowitsch, Claudius & Heimberger, Philipp & Kapeller, Jakob & Landesmann, Michael & Schütz, Bernhard, 2022. "The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 262-289.
    20. Alessandro Taberna & Tatiana Filatova & Andrea Roventini & Francesco Lamperti, 2021. "Coping with increasing tides: technological change, agglomeration dynamics and climate hazards in an agent-based evolutionary model," LEM Papers Series 2021/44, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    21. repec:hal:spmain:info:hdl:2441/20d1ncsepb9ssq3b3v4s6nbc41 is not listed on IDEAS
    22. repec:hal:spmain:info:hdl:2441/28ldm6et9r9pbak4qpf3imo9bj is not listed on IDEAS
    23. Emiliano Brancaccio & Mauro Gallegati & Raffaele Giammetti, 2022. "Neoclassical influences in agent‐based literature: A systematic review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 350-385, April.
    24. Dosi, Giovanni & Fagiolo, Giorgio & Napoletano, Mauro & Roventini, Andrea & Treibich, Tania, 2015. "Fiscal and monetary policies in complex evolving economies," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 166-189.
    25. Mauro Napoletano, 2018. "A Short Walk on the Wild Side: Agent-Based Models and their Implications for Macroeconomic Analysis," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 257-281.
    26. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2017. "When more flexibility yields more fragility: The microfoundations of Keynesian aggregate unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 162-186.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jecsur:v:31:y:2017:i:5:p:1183-1203. 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: . General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0950-0804 .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0950-0804 .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.