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Unemployment benefits and financial leverage in an agent based macroeconomic model

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  • Ricetti, Luca
  • Russo, Alberto
  • Gallegati, Mauro

Abstract

This paper is aimed at investigating the effects of government intervention through unemployment benefits on macroeconomic dynamics in an agent based decentralized matching framework. The major result is that the presence of such a public intervention in the economy stabilizes the aggregate demand and the financial conditions of the system at the cost of a modest increase of both the inflation rate and the ratio between public deficit and nominal GDP. The successful action of the public sector is sustained by the central bank which is committed to buy outstanding government securities.

Suggested Citation

  • 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, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-44.
  • Handle: RePEc:zbw:ifweej:201342
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2013-42
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    File URL: https://www.econstor.eu/bitstream/10419/90643/1/773889450.pdf
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    Cited by:

    1. repec:spr:italej:v:3:y:2017:i:3:d:10.1007_s40797-017-0060-4 is not listed on IDEAS
    2. 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.
    3. Rengs, Bernhard & Scholz-Waeckerle, Manuel, 2017. "Consumption & Class in Evolutionary Macroeconomics," MPRA Paper 80021, University Library of Munich, Germany.
    4. Kurt Kratena, 2015. "Thematic report: Macroeconomic models including specifically social and environmental aspects," WWWforEurope Deliverables series 8, WWWforEurope.
    5. repec:spr:italej:v:3:y:2017:i:3:d:10.1007_s40797-017-0065-z is not listed on IDEAS
    6. 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.
    7. Bernhard Rengs & Manuel Scholz-Wäckerle & Ardjan Gazheli & Miklós Antal & Jeroen van den Bergh, 2015. "Testing innovation, employment and distributional impacts of climate policy packages in a macro-evolutionary systems setting," WWWforEurope Working Papers series 83, WWWforEurope.
    8. 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.

    More about this item

    Keywords

    Agent based macroeconomics; business cycle; crisis; unemployment; leverage;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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