Simulating the Industrial Revolution: A History-Friendly Model

35 Pages Posted: 26 Apr 2023 Last revised: 14 May 2024

See all articles by Nicola Visonà

Nicola Visonà

Università degli Studi di Macerata - Department of Economics and Law

Luca Riccetti

Università degli Studi di Macerata

Date Written: January 31, 2023

Abstract

In this paper, we present a first modelization of Allen's argument on the British Industrial Revolution with a History-Friendly Model heuristic. To do so, we use a macroeconomic micro-founded framework with heterogeneous agents – households, firms, and institutions – interacting through a decentralized matching process presenting standard features across five markets – labor, food, goods, services, and government bonds.

We study the dynamics of the model by means of computer simulation. With the appropriate calibration macroeconomic properties emerge such as endogenous business cycles, and nominal GDP growth, while reproducing important stylized economic facts like the Industrial Revolution and Engel's Pause.

Keywords: Agent-Based Models, History-Friendly Models, Industrial Revolution, Macroeconomics

JEL Classification: B52, C63, D21, E17, N13, O14

Suggested Citation

Visonà, Nicola and Riccetti, Luca, Simulating the Industrial Revolution: A History-Friendly Model (January 31, 2023). Available at SSRN: https://ssrn.com/abstract=4418148 or http://dx.doi.org/10.2139/ssrn.4418148

Nicola Visonà (Contact Author)

Università degli Studi di Macerata - Department of Economics and Law ( email )

via Crescimbeni 20
Macerata, 62100
Italy

Luca Riccetti

Università degli Studi di Macerata ( email )

via Crescimbeni
Macerata
Italy

HOME PAGE: http://docenti.unimc.it/luca.riccetti

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