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Simulating the industrial revolution: a history-friendly model

Author

Listed:
  • Nicola Visonà

    (Università degli Studi di Macerata)

  • Luca Riccetti

    (Università degli Studi di Macerata)

Abstract

In this paper, we present a first modelization of Allen’s argument on the British industrial revolution with a history-friendly model heuristic. To do so, we use a macroeconomic micro-founded framework with heterogeneous agents—households, firms, and institutions—interacting through a decentralized matching process presenting standard features across five markets—labor, food, goods, services, and government bonds. We study the dynamics of the model using computer simulation. With the appropriate calibration, macroeconomic properties emerge such as endogenous business cycles and nominal GDP growth, while reproducing important stylized economic facts like the industrial revolution and Engel’s Pause.

Suggested Citation

  • Nicola Visonà & Luca Riccetti, 2024. "Simulating the industrial revolution: a history-friendly model," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 19(4), pages 831-862, October.
    • Handle: RePEc:spr:jeicoo:v:19:y:2024:i:4:d:10.1007_s11403-024-00421-3
    DOI: 10.1007/s11403-024-00421-3
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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