Behavioral Macroeconomics and Agent-Based Macroeconomics

  • Shu-Heng ChenEmail author
  • Umberto Gostoli
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 290)


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.


Agent-Based Macroeconomic Models Behavioral Macroeconomics Asymmetric Information Social Preferences Rule of Thumbs Wage Rigidity Hyperbolic Discounting 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Akerlof, G.: Behavioral macroeconomics and macroeconomic behavior. American Economic Review 92(3), 411–433 (2002)CrossRefGoogle Scholar
  2. 2.
    Arthur, W., Holland, J., LeBaron, B., Palmer, R., Tayler, P.: Asset pricing under endogenous expectations in an artificial stock market. In: Arthur, B., Durlauf, S., Lane, D. (eds.) The Economy as an Evolving Complex System II, pp. 15–44. Addison-Wesley, Reading (1997)Google Scholar
  3. 3.
    Ashraf, Q., Gershman, B., Howitt, P.: Banks, market organization, and macroeconomic performance: An agent-based computational analysis. Working paper, Brown University (2011)Google Scholar
  4. 4.
    Bruun, C.: Rediscovering the economics of Keynes in an agent-based computational setting. New Mathematics and Natural Computation (2013) (Forthcoming)Google Scholar
  5. 5.
    Chan, C., Steiglitz, K.: An agent-based model of a minimal economy. Working Paper of the Department of Computer Science, Princeton University (2008)Google Scholar
  6. 6.
    Cincotti, S., Raberto, M., Teglio, A.: The Eurace macroeconomic model and simulator. In: Aoki, M., Binmore, K., Deakin, S., Gintis, H. (eds.) Complexity and Institution: Markets, Norms and Corporations, Palgrave, pp. 81–104 (2012)Google Scholar
  7. 7.
    Delli Gatti, D., Desiderio, S., Gaffeo, E., Cirillo, P., Gallegati: Macroeconomics from the Bottom-up. Springer (2011)Google Scholar
  8. 8.
    Dosi, G., Fagiolo, G., Roventini, A.: Schumpeter Meeting Keynes: A Policy-Friendly Model of Endogenous Growth and Business Cycles. Journal of Economics Dynamics and Control 34(9), 1748–1767 (2010)CrossRefzbMATHMathSciNetGoogle Scholar
  9. 9.
    Dosi, G., Fagiolo, G., Napoletano, M., Roventini, A.: Income distribution, credit and fiscal policies in an agent-based keynesian model. Journal of Economic Dynamics and Control 37(8), 1598–1625 (2013)CrossRefMathSciNetGoogle Scholar
  10. 10.
    Fehr, E., Fischbacher, U.: Why social preferences matter: The impact of non-selfish motives on competition, cooperation and incentives. Economic Journal 112(478), C1–C33 (2002)Google Scholar
  11. 11.
    Fehr, E., Klein, A., Schmidt, K.: Fairness, incentives, and contractual incompleteness. Mimeo, University of Munich (2001)Google Scholar
  12. 12.
    Gaffeo, E., Gallegati, M., Gostoli, U.: An agent-based “proof of principle” for Walrasian macroeconomic theory. CEEL Working Papers 1202, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italy (2012)Google Scholar
  13. 13.
    Gintis, H.: The dynamics of general equilibrium. Economic Journal 117(523), 1280–1309 (2007)CrossRefGoogle Scholar
  14. 14.
    Kinsella, S., Greiff, M., Nell, E.: Income distribution in a stock-flow consistent model with education and technological change. Eastern Economic Journal 37, 134–149 (2011)CrossRefGoogle Scholar
  15. 15.
    Lengnick, M.: Agent-based macroeconomics: A baseline model. Journal of Economic Behavior & Organization 86, 102–120 (2013)CrossRefGoogle Scholar
  16. 16.
    Mandel, A., Jaeger, C., Fuerst, S., Lass, W., Lincke, D., Meissner, F., Pablo-Marti, F., Wolf, S.: Agent-based dynamics in disaggregated growth models. CES Working Paper 2010. 77 (2010)Google Scholar
  17. 17.
    Raberto, M., Teglio, A., Cincotti, S.: Integrating real and financial markets in an agent-based economic model: An application to monetary policy design. Computational Economics 32, 147–162 (2008)CrossRefzbMATHGoogle Scholar
  18. 18.
    Riccetti, L., Russo, A., Gallegati, M.: Unemployment benefits and financial leverage in an agent based macroeconomic model. Economics 7, 2013–2042 (2013), Google Scholar
  19. 19.
    Russo, A., Catalano, M., Gaffeo, E., Gallegati, M., Napoletano, M.: Industrial dynamics, fiscal policy and RD: Evidence from a computational experiment. Journal of Economic Behavior and Organization 64, 426–447 (2007)CrossRefGoogle Scholar
  20. 20.
    Wright, I.: The social architecture of capitalism. Physica A 346, 589–620 (2005)CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  1. 1.AI-ECON Research Center, Department of EconomicsNational Chengchi UniversityTaipeiTaiwan

Personalised recommendations