In this paper, we discuss a scaling approach to business fluctuations. Our starting point consists in recognizing that concepts and methods derived from physics have allowed economists to (re)discover a set of stylized facts which have to be satisfactorily accounted for in their models. Standard macroeconomics, based on a reductionist approach centred on the representative agent, is definitely badly equipped for this task. On the contrary, we show that a simple financial fragility agent-based model, based on complex interactions of heterogeneous agents, is able to replicate a large number of scaling type stylized facts with a remarkable high degree of statistical precision.

A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility / D., Delli Gatti; C., Di Guilmi; Gaffeo, Edoardo; G., Giulioni; M., Gallegati; A., Palestrini. - In: JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION. - ISSN 0167-2681. - STAMPA. - 56:56(2005), pp. 489-512.

A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility

Gaffeo, Edoardo;
2005-01-01

Abstract

In this paper, we discuss a scaling approach to business fluctuations. Our starting point consists in recognizing that concepts and methods derived from physics have allowed economists to (re)discover a set of stylized facts which have to be satisfactorily accounted for in their models. Standard macroeconomics, based on a reductionist approach centred on the representative agent, is definitely badly equipped for this task. On the contrary, we show that a simple financial fragility agent-based model, based on complex interactions of heterogeneous agents, is able to replicate a large number of scaling type stylized facts with a remarkable high degree of statistical precision.
2005
56
D., Delli Gatti; C., Di Guilmi; Gaffeo, Edoardo; G., Giulioni; M., Gallegati; A., Palestrini
A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility / D., Delli Gatti; C., Di Guilmi; Gaffeo, Edoardo; G., Giulioni; M., Gallegati; A., Palestrini. - In: JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION. - ISSN 0167-2681. - STAMPA. - 56:56(2005), pp. 489-512.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/72124
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