Micro and macro policies in the Keynes plus Schumpeter evolutionary models
Authored by Giovanni Dosi, Andrea Roventini, Mauro Napoletano, Tania Treibich
Date Published: 2017
DOI: 10.1007/s00191-016-0466-4
Sponsors:
Institute for New Economic Thinking
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Mathematical description
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Abstract
This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi
et al, J Econ Dyn Control 34 1748-1767 2010, J Econ Dyn Control 37
1598-1625 2013, J Econ Dyn Control 52 166-189 2015) evolutionary
agent-based models, which study the effects of a rich ensemble of
innovation, industrial dynamics and macroeconomic policies on the
long-term growth and short-run fluctuations of the economy. The K+S
models embed the Schumpeterian growth paradigm into a complex system of
imperfect coordination among heterogeneous interacting firms and banks,
where Keynesian (demand-related) and Minskian (credit cycle) elements
feed back into the meso and macro dynamics. The model is able to
endogenously generate long-run growth together with business cycles and
major crises. Moreover, it reproduces a long list of macroeconomic and
microeconomic stylized facts. Here, we discuss a series of experiments
on the role of policies affecting i) innovation, ii) industry dynamics,
iii) demand and iv) income distribution. Our results suggest the
presence of strong complementarities between Schumpeterian
(technological) and Keynesian (demand-related) policies in ensuring that
the economic system follows a path of sustained stable growth and
employment.
Tags
Agent-based model
Evolution
Innovation
Productivity
Distributions
information
Business cycles
investment
Credit
Innovation policies
Macroeconomic policies
Income inequality
Disequilibrium dynamics
Oecd countries
Output growth
Firms
Specificities