The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Precautionary Saving in the Small and in the Large

サイアート, マーチの「A Behavioral Theory of the Firm」

https://www.ineteconomics.org/uploads/papers/FiscalandMonetaryPoliciesinComplexEvolvingEconomies.pdf

Fiscal and monetary policies in complex evolving economies

Agent based-stock flow consistent macroeconomics: Towards a benchmark model

The global financial crisis has forced standard macroeconomics to re-examine the plausibility of its assumptions and the adequacy of the policy prescriptions flowing from those assumptions. We believe a renewal of macroeconomic thinking and macroeconomic modeling is possible by recognizing that our economies should be analyzed as complex adaptive systems. A coherent and exhaustive representation of the inter-linkages between the real and financial sides of the economy is vital as well. We propose a macroeconomic framework based on a novel combination of the Agent Based and Stock Flow Consistent approaches. This paper presents a benchmark model for this innovative approach. Our model depicts an economy with capital and credit in which different types of agents locally interact on different markets. We provide a detailed representation of individual agents’ balance sheets, ensuring the model accounting consistency at the micro, meso, and macro levels. We analyze the properties of our simulated economy under different configurations of agent heuristics, focusing in particular on the role of credit and investment. We explain in detail the logic followed to calibrate and validate the model. Results show that our benchmark model is able to reproduce many stylized facts observed in real world, thus representing a good starting point to test -- in the next works -- different economic policies and institutional setups. Finally, the relatively simple and flexible structure of the model opens up many possibilities for development of the framework along different lines, thus providing a fertile soil for new applications.

/pdf/agent-based-stock-flow-consistent-macroeconomics-towards-a-t5b49rvsef.pdf

Agent Based-Stock Flow Consistent Macroeconomics: Towards a Benchmark Model

We present a model of a dynamic and complex economy in which the creation and the destruction of money result from interactions between multiple and heterogeneous agents. In the baseline scenario, we observe the stabilization of the income distribution between wages and profits. We then alter the model by increasing the flexibility of wages. This change leads to the formation of a deflationary spiral. Aggregate activity decreases and the unemployment increases. The macroeconomic stability of the model is affected and eventually a systemic crisis arises. Finally, we show that the introduction of a minimum wage would have allowed the aggregate demand to be boosted and to avoid this crisis.

/pdf/flexibility-of-wages-and-macroeconomic-instability-in-an-8407lfe6nn.pdf

Flexibility of wages and macroeconomic instability in an agent-based computational model with endogenous money

This paper studies coordination between firms in a multi-sectoral macroeconomic model with endogenous business cycles. Firms are both in competition and interdependent, and set their prices with a markup over unit costs. Markups are heterogeneous and evolve under market pressure. We observe a systematic coordination within firms in each sector, and between each sector. The resulting pattern of relative prices are consistent with the labor theory of value. Those emerging features are robust to technology shocks.

/pdf/what-drives-markups-evolutionary-pricing-in-an-agent-based-3oa69ib6y2.pdf

What drives markups? Evolutionary pricing in an agent-based stock-flow consistent macroeconomic model

This paper proposes to model market mechanisms as a collective learning process for firms in a complex adaptive system, namely Jamel, an agent-based, stock-flow consistent macroeconomic model. Inspired by Alchian's (1950) " blanketing shotgun process " idea, our learning model is an ever-adapting process that puts a significant weight on exploration vis-a-vis exploitation. We show that decentralized market selection allows firms to collectively adapt their overall debt strategies to the changes in the macroeconomic environment so that the system sustains itself, but at the cost of recurrent deep downturns. We conclude that, in complex evolving economies, market processes do not lead to the selection of optimal behaviors, as the characterization of successful behaviors itself constantly evolves as a result of the market conditions that these behaviors contribute to shape. Heterogeneity in behavior remains essential to adaptation in such an ever-changing environment. We come to an evolutionary characterization of a crisis, as the point where the evolution of the macroeconomic system becomes faster than the adaptation capabilities of the agents that populate it, and the so far selected performing behaviors suddenly cease to be, and become instead undesirable.

Is the market really a good teacher

This paper presents a computational macroeconomic model which closely associates Keynesian thinking and an agent-based approach. This model is original because we do not introduce any causality between macroeconomic variables. Instead of postulate macroeconomic properties, we want to understand them by the methodic reconstruction of the conditions of their emergence, starting from their most elementary foundations: the interactions between individual agents. This model is the model of a dynamic out-of-equilibrium economy composed of two principal sets of agents (firms and households) associated with two main functions (production and consumption). The agents are not representative agents or aggregates but autonomous individuals in direct and indirect interactions, each of them pursuing its own purposes, acting according to their individual state and their local environment, without worrying about the general equilibrium of the system and without any overriding control.

/pdf/jamel-a-java-agent-based-macroeconomic-laboratory-2tvtklay2o.pdf

Jamel, a Java Agent-based MacroEconomic Laboratory

La theorie monetaire de la production, parce qu’elle s’attache a explorer les mecanismes du flux et du reflux de la monnaie dans le systeme economique, constitue un point d’appui essentiel pour une approche de la macroeconomie basee sur les interactions entre les agents. Cependant cette theorie s’appuie sur une representation abstraite du temps et de l’enchainement des interactions individuelles. Elle debouche sur des modeles qui ne rendent pas compte de facon satisfaisante de categories aussi essentielles que le profit et l’interet. Les techniques de modelisation multi-agents permettent de s’affranchir des limites des modeles analytiques traditionnels. Nous decrivons la construction d’un modele d’economie monetaire reellement dynamique, peuple d’agents multiples, autonomes et heterogenes en interaction directe et decentralisee, tout en respectant rigoureusement la coherence des stocks et des flux. Par la simulation, nous observons l’emergence de dynamiques macroeconomiques complexes qui montrent que ce modele, en donnant un contenu concret aux principes essentiels de la theorie monetaire de la production, permet d’en depasser les contradictions.

/pdf/pour-une-macroeconomie-monetaire-dynamique-et-complexe-2bty26xm5b.pdf

Pour une macroéconomie monétaire dynamique et complexe

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