Future methods of political economy: from Hicks’ equation systems to evolutionary macroeconomic simulation
Traditional macroeconomics and agent-based simulation (ABS) seem to be two disjunctive worlds, two different sprachspiele in the sense of Wittgenstein. It is not just the fact that macroeconomics has a long and distinguished history that on top of more than 200 years of discourse has recently adopted a sophisticated dynamic mathematical framework, while ABS is still in its infancy and for outsiders looks more like an intellectual toy than a serious research tool. Both languages are tools and eventually both are aiming at the same object of investigation: political economy. Why they let their object appear differently certainly is due to the intrinsic properties of the two languages. As is the case with every tool, the properties of the tool are to some extent transferred to the results that can be achieved with the respective tool. What aggravates this split of work styles is the fact that two different large research communities are linked to the use of the two languages; and each member of such a community has built already a considerable human capital stock, which consists mainly of elements that belong to exactly one of the two languages. Any expedition into the use of the foreign language runs into danger to make a part of the own toolset look obsolete, and thus to lose hard earned human capital. The incentives for cooperation disappear. To ease the pains of disaggregated research, the aim of this paper is to improve mutual understanding, and to show how far evolutionary macroeconomic simulation can advance political economy by explaining traditional macroeconomics as a (sometimes implausible) special case of its own more general approach. On the other hand ABS researchers often are unaware of the rich interpretative and empirically oriented treasures that classical macroeconomics has in store. What at first sight looks to be easily transferred into an algorithm turns out to be a highly refined argument, which in turn challenges the skills of ABS modelers. The most promising route to follow in the future certainly will be to be versatile in both languages, to walk on both feet. This short paper should provide a modest first step towards this goal.
|Date of creation:||31 Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Salvador Barrios & Harry Huizinga & Luc Laeven & Gaëtan J.A. Nicodème, 2008.
"International Taxation and Multinational Firm Location Decisions,"
CESifo Working Paper Series
2503, CESifo Group Munich.
- Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2012. "International taxation and multinational firm location decisions," Journal of Public Economics, Elsevier, vol. 96(11), pages 946-958.
- Salvador Barrios & Harry Huizinga & Luc Laeven & Gaëtan Nicodème, 2008. "International Taxation and Multinational Firm Location Decisions," Working Papers CEB 08-037.RS, ULB -- Universite Libre de Bruxelles.
- Salvador Barrios & Luc Laeven & Harry Huizinga & Gaetan Nicodeme, 2009. "International Taxation and Multinational Firm Location Decisions," Taxation Papers 16, Directorate General Taxation and Customs Union, European Commission, revised Apr 2009.
- Salvador Barrios & Harry Huizinga & Luc Laeven & GaÃ«tan NicodÃ¨me, 2009. "International taxation and multinational firm location decisions," European Economy - Economic Papers 356, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Salvador Barrios & Harry Huizinga & Luc Laeven & Gaëtan Nicodème, 2008. "International Taxation and Multinational Firm Location Decisions," Working Papers 0825, Oxford University Centre for Business Taxation.
- Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2008. "International Taxation and Multinational Firm Location Decisions," CEPR Discussion Papers 7047, C.E.P.R. Discussion Papers.
- Morgenstern, Oskar, 1976. "The Collaboration between Oskar Morgenstern and John von Neumann on the Theory of Games," Journal of Economic Literature, American Economic Association, vol. 14(3), pages 805-16, September.
- David Romer, 2000.
"Keynesian Macroeconomics without the LM Curve,"
NBER Working Papers
7461, National Bureau of Economic Research, Inc.
- Engelbert Stockhammer & Robert Stehrer, 2011.
"Goodwin or Kalecki in Demand? Functional Income Distribution and Aggregate Demand in the Short Run,"
Review of Radical Political Economics,
Union for Radical Political Economics, vol. 43(4), pages 506-522, December.
- Engelbert Stockhammer & Robert Stehrer, 2009. "Goodwin or Kalecki in Demand? Functional Income Distribution and Aggregate Demand in the Short Run," Working Papers wp203, Political Economy Research Institute, University of Massachusetts at Amherst.
- Acemoglu,Daron & Robinson,James A., 2006.
"Economic Origins of Dictatorship and Democracy,"
Cambridge University Press, number 9780521855266.
- Hanappi, Hardy, 2011. "Signs of reality - reality of signs. Explorations of a pending revolution in political economy," MPRA Paper 31570, University Library of Munich, Germany.
- Charles Wyplosz, 2012.
"Fiscal Rules: Theoretical Issues and Historical Experiences,"
NBER Working Papers
17884, National Bureau of Economic Research, Inc.
- Charles Wyplosz, 2012. "Fiscal Rules: Theoretical Issues and Historical Experiences," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 495-525 National Bureau of Economic Research, Inc.
- Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
- Wolfram Elsner & Hardy Hanappi (ed.), 2008. "Varieties of Capitalism and New Institutional Deals," Books, Edward Elgar, number 12843, March.
- H. Hanappi, 2007. "Macroeconomic Policy," Chapters, in: Elgar Companion to Neo-Schumpeterian Economics, chapter 61 Edward Elgar.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:47181. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.