Growing artificial societies: social science from the bottom up
Growing artificial societies: social science from the bottom up
Decentralized Allocation of Human Capital and Nonlinear Growth
Computational Economics
LUMPY INVESTMENT AND ENDOGENOUS BUSINESS CYCLES IN AN EVOLUTIONARY MULTI-AGENT MODEL
Cybernetics and Systems
Validation and Verification of Agent-Based Models in the Social Sciences
Epistemological Aspects of Computer Simulation in the Social Sciences
Regulation function of the environment in agent-based simulation
E4MAS'06 Proceedings of the 3rd international conference on Environments for multi-agent systems III
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In this paper, we present an evolutionary model of industry dynamics yielding endogenous business cycles with `Keynesian' features. The model describes an economy composed of firms and consumers/workers. Firms belong to two industries. The first one performs R&D and produces heterogeneous machine tools. Firms in the second industry invest in new machines and produce a homogenous consumption good. Consumers sell their labor and fully consume their income. In line with the empirical literature on investment patterns, we assume that the investment decisions by firms are lumpy and constrained by their financial structures. Moreover, drawing from behavioral theories of the firm, we assume boundedly rational expectation formation. Simulation results show that the model is able to deliver self-sustaining patterns of growth characterized by the presence of endogenous business cycles. The model can also replicate the most important stylized facts concerning micro- and macro-economic dynamics. Indeed, we find that investment is more volatile than GDP; consumption is less volatile than GDP; investment, consumption and change in stocks are procyclical and coincident variables; employment is procyclical; unemployment rate is anticyclical; firm size distributions are skewed but depart from log-normality; firm growth distributions are tent-shaped.