Agent Based Models

Agent based models, particularly when used in conjunction with AI and machine learning, offer a more general and realistic way of thinking about the economy than the conventional rational agent approach. Here is a paper on understanding recessions.

Here is a keynote presentation to a workshop of the Universita degli Studi di Genova, lead partner in the EURACE Project on the European economy using parallelisation technologies funded by the European Commission.

                                          Min           1^st quartile       Median            Mean        3^rd quartile      Max

US GDP growth           -13.20               1.36                3.10                 3.19              5.14              14.21

Model                             -9.63                0.52               3.19                 3.27              5.94             16.22

The parameter values are β = 0.5, γ = 0.4, ε₁ = 0.17, ε₂ = 1.6.

Data is 1871-2015 (excl. war years)