Journal Article

An interdisciplinary model for macroeconomics

A G Haldane and A E Turrell

in Oxford Review of Economic Policy

Volume 34, issue 1-2, pages 219-251
Published in print January 2018 | ISSN: 0266-903X
Published online January 2018 | e-ISSN: 1460-2121 | DOI: https://dx.doi.org/10.1093/oxrep/grx051
An interdisciplinary model for macroeconomics

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  • General Economics
  • History of Economic Thought (1925 onwards)
  • Economic Methodology
  • Mathematical Methods; Programming Methods; Mathematical and Simulation Modelling
  • Macroeconomics: Consumption, Saving, Production, Employment, and Investment
  • Macroeconomics and Monetary Economics

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Abstract

Macroeconomic modelling has been under intense scrutiny since the Great Financial Crisis, when serious shortcomings were exposed in the methodology used to understand the economy as a whole. Criticism has been levelled at the assumptions employed in the dominant models, particularly that economic agents are homogeneous and optimizing and that the economy is equilibrating. This paper seeks to explore an interdisciplinary approach to macroeconomic modelling, with techniques drawn from other (natural and social) sciences. Specifically, it discusses agent-based modelling, which is used across a wide range of disciplines, as an example of such a technique. Agent-based models are complementary to existing approaches and are suited to answering macroeconomic questions where complexity, heterogeneity, networks, and heuristics play an important role.

Keywords: macroeconomics; modelling; agent-based model; consumption

Journal Article.  13904 words.  Illustrated.

Subjects: General Economics ; History of Economic Thought (1925 onwards) ; Economic Methodology ; Mathematical Methods; Programming Methods; Mathematical and Simulation Modelling ; Macroeconomics: Consumption, Saving, Production, Employment, and Investment ; Macroeconomics and Monetary Economics

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