Behavioral Macroeconomics and Agent-Based Macroeconomics
In this article, we review the recent development of the agent-based macroeconomic models (ABMMs) using the skeleton of behavioral macroeconomics as proposed by George Akerlof. Based on the 15 models surveyed in this paper, we find that most behavioral elements addressed by Akerlof have not been well incorporated into the ABMMs. The only element which has been successfully well applied is the decision heuristics (rule-of-thumb behavior). We discuss the fundamental difficulties which cause the current deviations and highlight the expected efforts to meet the gap.
KeywordsAgent-Based Macroeconomic Models Behavioral Macroeconomics Asymmetric Information Social Preferences Rule of Thumbs Wage Rigidity Hyperbolic Discounting
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