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An ABM for Economics: Micro Explains Macro

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  • Luca Barone

    () (University of Torino, Italy)

Abstract

The link between micro and macro level has always been difficult to trace, even when variables have strong homogeneous characteristics. What happens when heterogeneous components and random factors interact is even more difficult to define. By adopting an agent-based approach we found a result that does not reflects the classical methods of quantification of an economy. This can be interpreted as an alarm bell signaling a wrong description of the economic framework we want to explain. We illustrate the effectiveness of the "agent-based reasoning machine" and we derive a model to compare with classical methods of aggregation. A more comprehensible description of the model is given by "Unified Modeling Language (UML)" and "ODD standard protocol", allowing us to clarify the internal processes of our model.

Suggested Citation

  • Luca Barone, 2013. "An ABM for Economics: Micro Explains Macro," Working papers 016, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:016
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    File URL: http://www.biblioecon.unito.it/biblioservizi/RePEc/tur/wpapnw/m16.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
    1. Hugues Bersini, 2012. "UML for ABM," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 15(1), pages 1-9.
    2. Frank Schorfheide, 2011. "Estimation and Evaluation of DSGE Models: Progress and Challenges," NBER Working Papers 16781, National Bureau of Economic Research, Inc.
    3. Burbidge, John & Cuff, Katherine, 2005. "Capital tax competition and returns to scale," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 353-373, July.
    4. Milton Friedman, 1957. "The Permanent Income Hypothesis," NBER Chapters,in: A Theory of the Consumption Function, pages 20-37 National Bureau of Economic Research, Inc.
    5. 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.
    6. Godley, Wynne, 1999. "Money and Credit in a Keynesian Model of Income Determination," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 393-411, July.
    7. 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, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Aggregation; NetLogo; Simulations; Micro-Macro link; Agent Based Models (ABMs); Unified Modeling Language (UML); ODD standard protocol;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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