Complex Dynamics and Empirical Evidence
34 Pages Posted: 12 May 2004
Date Written: May 5, 2004
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.
Keywords: Business fluctuations, power law distribution, agent-based model
JEL Classification: E32, C63, C82
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