Complex dynamics and empirical evidence

Authored by Alberto Russo, Edoardo Gaffeo, Alan Kirman, Antonio Palestrini

Date Published: 2007-03-01

DOI: 10.1016/j.ins.2006.08.003

Sponsors: No sponsors listed

Platforms: No platforms listed

Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

Standard macroeconomics, based on a reductionist approach centered on the representative agent, is badly equipped to explain the empirical evidence where heterogeneity and industrial dynamics are the rule. In this paper we show that a simple agent-based model of heterogeneous financially fragile agents is able to replicate a large number of scaling type stylized facts with a remarkable degree of statistical precision. (c) 2006 Elsevier Inc. All rights reserved.

Tags

Agent-based model Business Fluctuations power law distribution