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Elements of Dynamic Economic Modeling: Presentation and Analysis

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  • Tesfatsion, Leigh

Abstract

The primary goal of these introductory notes is to promote the clear presentation and rigorous analysis of dynamic economic models, whether presented in equation or agent-based form. A secondary goal is to promote the use of state-space modeling with its respect for historical process, for cause leading to effect without top-down imposition of global constraints. If economic modelers truly wish to respect the rationality of decision-makers, they should have the courage of their convictions; they should not be doing for their modeled decision-makers what in reality these decision-makers must do for themselves.

Suggested Citation

  • Tesfatsion, Leigh, 2014. "Elements of Dynamic Economic Modeling: Presentation and Analysis," Staff General Research Papers Archive 37306, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:37306
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    File URL: http://www2.econ.iastate.edu/tesfatsi/EconomicDynamicModelingBasics.pdf
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    References listed on IDEAS

    as
    1. Leigh Tesfatsion, 2011. "Agent-based Modeling and Institutional Design," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(1), pages 13-19.
    2. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711.
    3. David Kendrick, 2007. "Teaching Computational Economics to Graduate Students," Computational Economics, Springer;Society for Computational Economics, vol. 30(4), pages 381-391, November.
    4. Mario J. Miranda & Paul L. Fackler, 2004. "Applied Computational Economics and Finance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633094.
    5. Tesfatsion, Leigh, 1986. "Time inconsistency of benevolent government economies," Journal of Public Economics, Elsevier, vol. 31(1), pages 25-52, October.
    6. Sinitskaya, Ekaterina & Tesfatsion, Leigh, 2015. "Macroeconomies as constructively rational games," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 152-182.
    7. James Nicolaisen & Valentin Petrov & Leigh Tesfatsion, 2000. "Market Power and Efficiency in a Computational Electricity Market with Discriminatory Double-Auction Pricing," Computational Economics 0004005, University Library of Munich, Germany.
    8. Leigh Tesfatsion & Kenneth L. Judd (ed.), 2006. "Handbook of Computational Economics," Handbook of Computational Economics, Elsevier, edition 1, volume 2, number 2.
    9. Tesfatsion, Leigh & Jie, Yu & Rehmann, Chris R. & Gutowski, William J., 2015. "WACCShed: A Platform for the Study of Watersheds as Dynamic Coupled Natural and Human Systems," ISU General Staff Papers 201512160800001226, Iowa State University, Department of Economics.
    10. repec:eee:ecomod:v:221:y:2010:i:23:p:2760-2768 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201702180800001022, Iowa State University, Department of Economics.
    2. Múñoz, Féliz-Fernando & Encinar, María-Isabel & Cañibano, Carolina, 2016. "Agents, interaction, and economic laws: An analytical framework for understanding different economic theories," Working Papers in Economic Theory 2016/05, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    3. repec:taf:jecmet:v:24:y:2017:i:4:p:384-409 is not listed on IDEAS
    4. repec:gam:jsusta:v:10:y:2018:i:2:p:432-:d:130690 is not listed on IDEAS
    5. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201704300700001022, Iowa State University, Department of Economics.
    6. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201703280700001022, Iowa State University, Department of Economics.
    7. Leigh Tesfatsion, 2017. "Modeling economic systems as locally-constructive sequential games," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(4), pages 384-409, October.

    More about this item

    Keywords

    Dynamic economic modeling; state-space model; presentation; analysis;

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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