IDEAS home Printed from https://ideas.repec.org/a/pal/easeco/v45y2019i4d10.1057_s41302-018-0114-9.html
   My bibliography  Save this article

Exploring the Social-Architecture Model

Author

Listed:
  • Alan G. Isaac

    (American University)

Abstract

Microfoundations proposed for macroeconomics often include strong counterfactual assumptions about the knowledge and foresight of agents and about the pervasiveness of equilibrium exchange. This paper explores and improves the social-architecture model, an agent-based macromodel that discards such assumptions. In this monetary exchange economy, individuals transact at disequilibrium prices in shopping-based goods markets and search-based labor markets. GDP and unemployment distributions are emergent outcomes of the individual-level interactions. These distributions expose some problems in the original model. Modest model amendments largely address these problems. Some apparently central ingredients of the model prove to have little influence on the simulation results.

Suggested Citation

  • Alan G. Isaac, 2019. "Exploring the Social-Architecture Model," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(4), pages 565-589, October.
    • Handle: RePEc:pal:easeco:v:45:y:2019:i:4:d:10.1057_s41302-018-0114-9
    DOI: 10.1057/s41302-018-0114-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41302-018-0114-9
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41302-018-0114-9?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Edoardo Gaffeo & Domenico Delli Gatti & Saul Desiderio & Mauro Gallegati, 2008. "Adaptive Microfoundations for Emergent Macroeconomics," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 34(4), pages 441-463.
    2. Franck Jovanovic & Christophe Schinckus, 2013. "The Emergence of Econophysics: A New Approach in Modern Financial Theory," History of Political Economy, Duke University Press, vol. 45(3), pages 443-474, Fall.
    3. Neveu, Andre R., 2013. "Fiscal policy and business cycle characteristics in a heterogeneous agent macro model," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 224-240.
    4. Ashraf, Quamrul & Gershman, Boris & Howitt, Peter, 2017. "Banks, market organization, and macroeconomic performance: An agent-based computational analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 135(C), pages 143-180.
    5. Xavier Gabaix & Parameswaran Gopikrishnan & Vasiliki Plerou & H. Eugene Stanley, 2006. "Institutional Investors and Stock Market Volatility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 461-504.
    6. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
    7. Brown, Sarah & Taylor, Karl, 2013. "Reservation wages, expected wages and unemployment," Economics Letters, Elsevier, vol. 119(3), pages 276-279.
    8. John T. Addison & José A. F. Machado & Pedro Portugal, 2013. "The Reservation Wage Unemployment Duration Nexus," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 980-987, December.
    9. Lucas, Robert E, Jr & Stokey, Nancy L, 1987. "Money and Interest in a Cash-in-Advance Economy," Econometrica, Econometric Society, vol. 55(3), pages 491-513, May.
    10. 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.
    11. Gode, Dhananjay K & Sunder, Shyam, 1993. "Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 119-137, February.
    12. Heath Henderson & Alan G. Isaac, 2017. "Modern Value Chains and the Organization of Agrarian Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 379-400.
    13. J. Doyne Farmer & Paolo Patelli & Ilija I. Zovko, 2003. "The Predictive Power of Zero Intelligence in Financial Markets," Papers cond-mat/0309233, arXiv.org, revised Feb 2004.
    14. 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.
    15. Foley Duncan K., 1994. "A Statistical Equilibrium Theory of Markets," Journal of Economic Theory, Elsevier, vol. 62(2), pages 321-345, April.
    16. Hans-Werner Sinn, 1980. "A Rehabilitation of the Principle of Insufficient Reason," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(3), pages 493-506.
    17. David C. Colander, 2018. "The Macrofoundations Of Micro," Chapters, in: How Economics Should Be Done, chapter 10, pages 133-143, Edward Elgar Publishing.
    18. Wright, Ian, 2009. "Implicit Microfoundations for Macroeconomics," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-27.
    19. James B. Bullard, 1999. "Testing long-run monetary neutrality propositions: lessons from the recent research," Review, Federal Reserve Bank of St. Louis, vol. 81(Nov), pages 57-77.
    20. Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211-211.
    21. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-498, June.
    22. Arthur Lewbel, 1989. "Exact Aggregation and a Representative Consumer," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(3), pages 621-633.
    23. 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.
    24. Alan Isaac, 2007. "Inheriting inequality: institutional influences on the distribution of wealth," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 30(2), pages 187-203.
    25. Mortensen, Dale T, 1970. "Job Search, the Duration of Unemployment, and the Phillips Curve," American Economic Review, American Economic Association, vol. 60(5), pages 847-862, December.
    26. Adrian Dragulescu & Victor M. Yakovenko, 2000. "Statistical mechanics of money," Papers cond-mat/0001432, arXiv.org, revised Aug 2000.
    27. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-595, September.
    28. Paul Davidson, 1987. "Sensible Expectations and the Long-Run Non-Neutrality of Money," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 10(1), pages 146-153, September.
    29. Ian Wright, 2008. "The Emergence of the Law of Value in a Dynamic Simple Commodity Economy," Review of Political Economy, Taylor & Francis Journals, vol. 20(3), pages 367-391.
    30. Dave Colander, 2018. "On the Irrelevance of Formal General Equilibrium Analysis," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(3), pages 491-495, June.
    31. Lucas, Robert E, Jr, 1980. "Equilibrium in a Pure Currency Economy," Economic Inquiry, Western Economic Association International, vol. 18(2), pages 203-220, April.
    32. Joshua M. Epstein & Robert L. Axtell, 1996. "Growing Artificial Societies: Social Science from the Bottom Up," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550253, December.
    Full references (including those not matched with items on IDEAS)

    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. Wright, Ian, 2009. "Implicit Microfoundations for Macroeconomics," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-27.
    2. Gallegati, Mauro & Kirman, Alan, 2019. "20 years of WEHIA: A journey in search of a safer road," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 5-14.
    3. 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.
    4. Juan Manuel Larrosa, 2016. "Agentes computacionales y análisis económico," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(34), pages 87-113, January-J.
    5. repec:spo:wpecon:info:hdl:2441/53r60a8s3kup1vc9l5643ehjk is not listed on IDEAS
    6. Tesfatsion, Leigh, 1998. "Teaching Agent-Based Computational Economics to Graduate Students," ISU General Staff Papers 199807010700001043, Iowa State University, Department of Economics.
    7. Mauro Napoletano & Jean-Luc Gaffard & Zakaria Babutsidze, 2012. "Agent Based Models: A New Tool for Economic and Policy Analysis," Sciences Po publications info:hdl:2441/121881fn7h9, Sciences Po.
    8. repec:hal:wpspec:info:hdl:2441/53r60a8s3kup1vc9l5643ehjk is not listed on IDEAS
    9. repec:hal:spmain:info:hdl:2441/53r60a8s3kup1vc9l5643ehjk is not listed on IDEAS
    10. 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.
    11. Lux, Thomas, 2008. "Applications of statistical physics in finance and economics," Kiel Working Papers 1425, Kiel Institute for the World Economy (IfW Kiel).
    12. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    13. Mauro Napoletano & Jean-Luc Gaffard & Zakaria Babutsidze, 2012. "Agent Based Models," SciencePo Working papers Main hal-03461262, HAL.
    14. Mauro Napoletano & Jean-Luc Gaffard & Zakaria Babutsidze, 2012. "Agent Based Models A New Tool for Economic and Policy Analysis: A New Tool for Economic and Policy Analysis," Sciences Po publications 3, Sciences Po.
    15. Thomas Lux, 2009. "Applications of Statistical Physics in Finance and Economics," Chapters, in: J. Barkley Rosser Jr. (ed.), Handbook of Research on Complexity, chapter 9, Edward Elgar Publishing.
    16. repec:hal:spmain:info:hdl:2441/121881fn7h9haadnuq3gp3ujjd is not listed on IDEAS
    17. Oriol Valles Codina, 2020. "Economic Production as Life: A Classical Approach to Computational Social Science," Working Papers 2001, New School for Social Research, Department of Economics.
    18. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    19. 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.
    20. Tamotsu Onozaki, 2018. "Nonlinearity, Bounded Rationality, and Heterogeneity," Springer Books, Springer, number 978-4-431-54971-0, November.
    21. Ricetti, Luca & Russo, Alberto & Gallegati, Mauro, 2013. "Unemployment benefits and financial leverage in an agent based macroeconomic model," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 7, pages 1-44.
    22. Flaminio Squazzoni, 2010. "The impact of agent-based models in the social sciences after 15 years of incursions," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(2), pages 197-234.
    23. 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.
    24. Arthur T. Denzau & Douglass C. North, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31, February.

    More about this item

    Keywords

    Agent-based macroeconomics; Microfoundations; Behavioral agnosticism;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches

    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:pal:easeco:v:45:y:2019:i:4:d:10.1057_s41302-018-0114-9. See general information about how to correct material in RePEc.

    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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.