Agent-Based Modelling
Agent-based macroeconomic models offer a new approach to the analysis of economic relationships. The models describe the dynamics of a population of heterogeneous, limited-rational economic actors whose interaction at the micro level is defined by market protocols. The agents have their own rules of behaviour and expectations.
New models are also based on findings from experimental or empirical research and take into account relevant economic policy interrelations. In terms of model technology, agent-based macroeconomic models correspond to complex nonlinear dynamic systems. In such models, macroeconomic correlations result from the explicit aggregation of individual decisions of a large number of heterogeneous economic subjects as emergent characteristics. The lack of a consensus model can (still) be seen as a weakness of this model approach. For this reason, the focus is increasingly on empirical validation by replicating relevant distributions and stylised facts.
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