Virtual Model Validation for Economics

Abstract:     
How can economic policies lead us to greater wealth, welfare and happiness? There is no bigger question in economics. The answer lies in correct economic theories that capture the causality linking policies to outcomes. Economic theories are a dime a dozen – we have more theories than we have human beings. The key need to answer any economic question lies in our ability to validate theories. Do we live in an Austrian world? In a Keynesian world? A world of rational expectations? This White Paper proposes that major advances in simulating virtual economies is possible and would form the basis for rapid and accurate assessment of current and future economic models. I make general proposals for developing infrastructure, as well as presenting specific ideas about the nature of models of sophisticated expectations that are needed to allow artificial agents to mimic the behavior of real human beings.

Number of Pages in PDF File: 5

working papers series