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An interdisciplinary model for macroeconomics

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Abstract

Macroeconomic modelling has been under intense scrutiny since the Great Financial Crisis, when serious shortcomings were exposed in the methodology used to understand the economy as a whole. Criticism has been levelled at the assumptions employed in the dominant models, particularly that economic agents are homogeneous and optimizing and that the economy is equilibrating. This paper seeks to explore an interdisciplinary approach to macroeconomic modelling, with techniques drawn from other (natural and social) sciences. Specifically, it discusses agent-based modelling, which is used across a wide range of disciplines, as an example of such a technique. Agent-based models are complementary to existing approaches and are suited to answering macroeconomic questions where complexity, heterogeneity, networks, and heuristics play an important role.

Suggested Citation

  • A G Haldane & A E Turrell, 2018. "An interdisciplinary model for macroeconomics," Oxford Review of Economic Policy, Oxford University Press, vol. 34(1-2), pages 219-251.
  • Handle: RePEc:oup:oxford:v:34:y:2018:i:1-2:p:219-251.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grx051
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    Cited by:

    1. Lorenzo Esposito & Giuseppe Mastromatteo, 2019. "Defaultnomics: Making Sense of the Barro-Ricardo Equivalence in a Financialized World," Economics Working Paper Archive wp_933, Levy Economics Institute.
    2. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And Then He Wasn't a She: Climate Change and Green Transitions in an Agent-Based Integrated Assessment Model," LEM Papers Series 2018/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. repec:scn:financ:y:2019:i:1:p:13-26 is not listed on IDEAS
    4. Lilit Popoyan & Mauro Napoletano & Andrea Roventini, 2019. "Winter is possibly not coming: Mitigating financial instability in an agent-based model with interbank market," LEM Papers Series 2019/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Jean-Luc Gaffard, 2018. "Monetary theory and policy: the debate revisited," LEM Papers Series 2018/37, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Elena Deryugina & Alexey Ponomarenko & Anna Rozhkova, 2018. "When are credit gap estimates reliable?," Bank of Russia Working Paper Series wps34, Bank of Russia.
    7. Gulan, Adam, 2018. "Paradise lost? A brief history of DSGE macroeconomics," Research Discussion Papers 22/2018, Bank of Finland.
    8. repec:cdh:commen:549 is not listed on IDEAS
    9. repec:eee:ecolec:v:149:y:2018:i:c:p:239-253 is not listed on IDEAS
    10. Jean-Philippe Bouchaud, 2019. "Econophysics: Still fringe after 30 years?," Papers 1901.03691, arXiv.org.
    11. Hommes, Cars, 2018. "Behavioral & experimental macroeconomics and policy analysis: a complex systems approach," Working Paper Series 2201, European Central Bank.
    12. Jean-Philippe Bouchaud & Stanislao Gualdi & Marco Tarzia & Francesco Zamponi, 2018. "Optimal inflation target: insights from an agent-based model," Post-Print hal-01768441, HAL.
    13. repec:eee:dyncon:v:100:y:2019:i:c:p:200-229 is not listed on IDEAS
    14. James Paulin & Anisoara Calinescu & Michael Wooldridge, 2018. "Understanding Flash Crash Contagion and Systemic Risk: A Micro-Macro Agent-Based Approach," Papers 1805.08454, arXiv.org.
    15. Ramis Khabibullin & Alexey Ponomarenko & Sergei Seleznev, 2018. "Forecasting the implications of foreign exchange reserve accumulation with an agent-based model," Bank of Russia Working Paper Series wps37, Bank of Russia.
    16. repec:acf:journl:y:2019:id:1036 is not listed on IDEAS
    17. repec:zbw:ifweej:201815 is not listed on IDEAS

    More about this item

    Keywords

    macroeconomics; modelling; agent-based model; consumption;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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