Rediscovering the Economics of Keynes in an Agent-Based Computational Setting

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    The aim of this paper is to use agent-based computational economics to explore the economic thinking of Keynes. Taking his starting point at the macroeconomic level, Keynes argued that economic systems are characterized by fundamental uncertainty - an uncertainty that makes rule-based behaviour and reliance on monetary magnitudes more optimal to the economic agent than profit- and utility optimazation in the traditional sense. Unfortunately more systematic studies of the properties of such a system was not possible at the time of Keynes. The system envisioned by Keynes holds a lot of properties in commen with what we today call complex dynamic systems, and today we may aply the method of agent-based computational economics to the ideas of Keynes. The presented agent-based Keynesian model demonstrate, as argued by Keynes, that the economy can selforganize without relying on price movement as an equilibrating factor. Selforganization does, however, not mean a steady long run equilibrium, but a tendency to generate cycles.
    Original languageEnglish
    Publication date2008
    Publication statusPublished - 2008
    EventAgent-Based Moedelling in Economics and Finance - Trento, Italy
    Duration: 19 May 200820 May 2008


    ConferenceAgent-Based Moedelling in Economics and Finance


    • Agent-based computational economics

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