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Monday, March 29, 2021

Can We Replicate DSGE Models With An Agent-Based Model?

I have another non-paywalled draft PDF on my Patreon (link). They are initial musings about a theoretical question: can we implement an agent-based model, and have it converge to a DSGE model equilibrium solution?

The text is somewhat rough, as it is a brainstorming document rather than a finished product. My conjecture is that the only way to get a DSGE-style equilibrium is to force the agents to use that solution, which is not within the "spirit" of agent-based modelling.

With that digression out of the way, I have returned to puttering around with my Python agent-based framework. The code is still preliminary, and I would not yet describe it as a functioning model. However, within a few weeks, it should start to resemble a very simple model that could be related to an aggregate model of the economy.

(As for my Patreon, for now I am now treating it as a place to host free PDF's. Once the agent-based framework is in a functioning state, I will place high-level design documents as a treat for Patrons, and it
would be "open for business" in a real sense.)

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