logoalt Hacker News

huitzitziltzinlast Wednesday at 2:44 AM2 repliesview on HN

There’s a whole discipline which does nearly that, though they do not use this style of agent based model.

Generally agent based models have numerous parameters which can take many values (endowments, preferences) and the models don’t themselves give any guidance about how to set the parameters. Theory can give limited guidance (eg., that function is concave, this parameter is negative). Sometimes we have experimental data though its generalizability beyond the lab is uncertain.

What you want to do to create a scientific macroeconomics is to work backwards from the data you see in the economy (aggregate consumption, investment, etc.) and how you know the aggregates were generated (via the behavior of a lot of individual agents), and an equilibrium assumption to recover the parameters.

If you know the parameters of the model you assume, you can then simulate interesting counterfactuals. (And yes you assume the model - a “full” model including “all” of the individual endowments and parameters you can think of is completely intractable. You have to simplify.)

You’ll never get that out of the author’s computer game.

If you want references to the macro literature it’s enormous and I can provide them.


Replies

nxobjectlast Wednesday at 7:14 PM

Would you happen to know what some key search phrases might be to get started in the contemporary modeling literature?

show 1 reply
littlestymaarlast Wednesday at 7:41 AM

> and an equilibrium assumption to recover the parameters

That parts makes no sense though, there isn't an equilibrium and can never be, economies are a chaotic system. One of the key problems of economic modeling is that they used mathematical tool that aren't suited for that.

You can't consider an economy as a steam engine. Walras was a trained engineer in the 19th century so I can excuse him for making this approximation, but I can't excuse anyone still following his course more than a century later.

show 1 reply