A Keynes-Kalecki Model of Cyclical Growth with Agent-Based Features
affiliation not provided to SSRN
September 16, 2010
MICROECONOMICS, MACROECONOMICS AND ECONOMIC POLICY: ESSAYS IN HONOUR OF MALCOLM SAWYER, P. Arestis, ed., Palgrave, 2010
Throughout his career, Malcolm Sawyer has both encouraged and contributed to the development of a Kaleckian alternative to conventional macroeconomic theory. In the spirit of this endeavour, we construct a Keynes-Kalecki model of cyclical growth with agent-based features. Our model is driven by heterogeneous firms who, confronting an environment of fundamental uncertainty, revise their “state of long run expectations” in response to recent events. Model simulations generate fluctuations in the rate of growth that are aperiodic and of variable amplitude. We also study the size distribution of firms resulting from our simulations, finding evidence of a power law distribution that we have no reason to anticipate from the basic structure of our model. Finally, we reflect on the potential advantages of combining aggregate structural modeling with some of the methods and practices of agent-based computational economics.
Number of Pages in PDF File: 36
Keywords: Kaleckian Model, Growth, Cycles, Agent-Based Computational Economics
JEL Classification: E12, E32, E37, O41Accepted Paper Series
Date posted: September 16, 2010
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