{"id":443185,"date":"2026-03-10T14:12:41","date_gmt":"2026-03-10T13:12:41","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/443185\/"},"modified":"2026-04-01T17:38:10","modified_gmt":"2026-04-01T15:38:10","slug":"analyzing-and-forecasting-economic-crises-with-an-agent-based-model-of-the-euro-area","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/","title":{"rendered":"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-443185","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"We develop an agent-based model for the euro area that fulfils widely recommended requirements for next-generation macroeconomic models by i) incorporating financial frictions, ii) relaxing the requirement of rational expectations, and iii) including heterogeneous agents. Using macroeconomic and sectoral data, the model includes all sectors (financial, non-financial, household, and a general government) and connects financial flows and balance sheets with stock-flow consistency. The model, moreover, incorporates many features considered essential for future policy models, such as a financial accelerator with debt-financed investment and a complete GDP identity, and allows for non-linear responses. We first show that the agent-based model outperforms dynamic stochastic general equilibrium and vector autoregression models in out-of-sample forecasting. We then demonstrate that the model can help make sense of extreme macroeconomic movements and apply the model to the three recent major economic crises of the euro area: the Financial crisis of 2007-2008 and the subsequent Great Recession, the European sovereign debt crisis, and the COVID-19 recession. We show that the model, due to non-linear responses, is capable of predicting a severe crisis arising endogenously around the most intense phase of the Great Recession in the euro area without any exogenous shocks. By analysing the COVID-19 recession, we further demonstrate the model for scenario analysis with exogenous shocks. Here we show that the model reproduces the observed deep recession followed by a swift recovery and also captures the persistent rise in inflation following the COVID-19 recession.","onlinedate":"2023-03-13 01:00:00","lang":"English","publication_series":"","publication_date":"20230313","publication_date_year":"","publication_date_full":true,"publication_num_pages":"46","keywords":"[]","jelcodes":"[]","related_publications":"[]","pdf":null,"zip":null,"link":"https:\/\/doi.org\/10.2139\/ssrn.4381261","monthly_report":false,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"","journal":"SSRN Electronic Journal","publisher":"","invisible":false,"external":true,"embargo_date":null,"types":[83083],"research_groups":[3500],"collaboration":"","persons":[443250,430221],"persons_data":"[{\"personId\":443250,\"personName\":\"Cars H. Hommes\",\"organisationNames\":[]},{\"personId\":430221,\"personName\":\"Sebastian Poledna\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/\" \/>\n<meta property=\"og:site_name\" content=\"WIFO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/WIFOat\/\" \/>\n<meta property=\"article:modified_time\" content=\"2026-04-01T15:38:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@WIFOat\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/\",\"url\":\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/\",\"name\":\"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area - WIFO\",\"isPartOf\":{\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#website\"},\"datePublished\":\"2026-03-10T13:12:41+00:00\",\"dateModified\":\"2026-04-01T15:38:10+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Startseite\",\"item\":\"https:\/\/www.wifo.ac.at\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#website\",\"url\":\"https:\/\/www.wifo.ac.at\/en\/\",\"name\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#organization\"},\"alternateName\":\"WIFO\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.wifo.ac.at\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#organization\",\"name\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"alternateName\":\"WIFO\",\"url\":\"https:\/\/www.wifo.ac.at\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg\",\"contentUrl\":\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg\",\"width\":2000,\"height\":429,\"caption\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\"},\"image\":{\"@id\":\"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/WIFOat\/\",\"https:\/\/x.com\/WIFOat\",\"https:\/\/linkedin.com\/company\/wifoat\/\",\"https:\/\/www.youtube.com\/@WIFO_at\"],\"description\":\"Das WIFO, 1927 von Friedrich August von Hayek und Ludwig von Mises zur Konjunkturanalyse gegr\u00fcndet, ist heute das f\u00fchrende Institut f\u00fcr angewandte empirische Wirtschaftsforschung in \u00d6sterreich mit starkem Engagement auf europ\u00e4ischer Ebene.\",\"email\":\"office@wifo.ac.at\",\"telephone\":\"+43 1 798 26 01 \u2013 0\",\"legalName\":\"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung\",\"foundingDate\":\"1927-01-02\",\"numberOfEmployees\":{\"@type\":\"QuantitativeValue\",\"minValue\":\"51\",\"maxValue\":\"200\"},\"publishingPrinciples\":\"https:\/\/www.wifo.ac.at\/institut\/mission-und-strategie\/\",\"ownershipFundingInfo\":\"https:\/\/www.wifo.ac.at\/institut\/organisation\/\",\"actionableFeedbackPolicy\":\"https:\/\/www.wifo.ac.at\/aktuelles\/presse\/\",\"correctionsPolicy\":\"https:\/\/www.wifo.ac.at\/institut\/kontakt\/\",\"ethicsPolicy\":\"https:\/\/www.wifo.ac.at\/institut\/evidenzbasierung-transparenz-und-unabhaengigkeit\/\",\"diversityPolicy\":\"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/\",\"diversityStaffingReport\":\"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area - WIFO","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/","og_locale":"en_US","og_type":"article","og_title":"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area","og_url":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/","og_site_name":"WIFO","article_publisher":"https:\/\/www.facebook.com\/WIFOat\/","article_modified_time":"2026-04-01T15:38:10+00:00","og_image":[{"width":1920,"height":1280,"url":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_site":"@WIFOat","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/","url":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/","name":"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area - WIFO","isPartOf":{"@id":"https:\/\/www.wifo.ac.at\/en\/#website"},"datePublished":"2026-03-10T13:12:41+00:00","dateModified":"2026-04-01T15:38:10+00:00","breadcrumb":{"@id":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.wifo.ac.at\/en\/publication\/443185\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.wifo.ac.at\/en\/publication\/443185\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Startseite","item":"https:\/\/www.wifo.ac.at\/en\/"},{"@type":"ListItem","position":2,"name":"Analyzing and Forecasting Economic Crises with an Agent-based Model of the Euro Area"}]},{"@type":"WebSite","@id":"https:\/\/www.wifo.ac.at\/en\/#website","url":"https:\/\/www.wifo.ac.at\/en\/","name":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","description":"","publisher":{"@id":"https:\/\/www.wifo.ac.at\/en\/#organization"},"alternateName":"WIFO","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.wifo.ac.at\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.wifo.ac.at\/en\/#organization","name":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","alternateName":"WIFO","url":"https:\/\/www.wifo.ac.at\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/","url":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg","contentUrl":"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO_kurz_rechts-2-1920x412.jpg","width":2000,"height":429,"caption":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung"},"image":{"@id":"https:\/\/www.wifo.ac.at\/en\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/WIFOat\/","https:\/\/x.com\/WIFOat","https:\/\/linkedin.com\/company\/wifoat\/","https:\/\/www.youtube.com\/@WIFO_at"],"description":"Das WIFO, 1927 von Friedrich August von Hayek und Ludwig von Mises zur Konjunkturanalyse gegr\u00fcndet, ist heute das f\u00fchrende Institut f\u00fcr angewandte empirische Wirtschaftsforschung in \u00d6sterreich mit starkem Engagement auf europ\u00e4ischer Ebene.","email":"office@wifo.ac.at","telephone":"+43 1 798 26 01 \u2013 0","legalName":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","foundingDate":"1927-01-02","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"51","maxValue":"200"},"publishingPrinciples":"https:\/\/www.wifo.ac.at\/institut\/mission-und-strategie\/","ownershipFundingInfo":"https:\/\/www.wifo.ac.at\/institut\/organisation\/","actionableFeedbackPolicy":"https:\/\/www.wifo.ac.at\/aktuelles\/presse\/","correctionsPolicy":"https:\/\/www.wifo.ac.at\/institut\/kontakt\/","ethicsPolicy":"https:\/\/www.wifo.ac.at\/institut\/evidenzbasierung-transparenz-und-unabhaengigkeit\/","diversityPolicy":"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/","diversityStaffingReport":"https:\/\/www.wifo.ac.at\/institut\/gleichstellung\/"}]}},"_links":{"self":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/443185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication"}],"about":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/types\/publication"}],"version-history":[{"count":2,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/443185\/revisions"}],"predecessor-version":[{"id":444732,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication\/443185\/revisions\/444732"}],"acf:post":[{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/person\/430221"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/external_person\/443250"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/research_group\/3500"},{"embeddable":true,"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/publication_type\/83083"}],"wp:attachment":[{"href":"https:\/\/www.wifo.ac.at\/en\/wp-json\/wp\/v2\/media?parent=443185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}