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Agent-based Macroeconomics and Dynamic Stochastic General Equilibrium Models: Where do we go from here?

Dilaver, Ozge, Jump, R and Levine, Paul (2018) Agent-based Macroeconomics and Dynamic Stochastic General Equilibrium Models: Where do we go from here? Journal of Economic Surveys, 32 (4). pp. 1134-1159.

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ACE-DSGE_Survey_JES_Submission_2nd_Revision_paper.pdf - Accepted version Manuscript
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Agent-based computational economics (ACE) has been used for tackling major research ques- tions in macroeconomics for at least two decades. This growing field positions itself as an alternative to dynamic stochastic general equilibrium (DSGE) models. In this paper, we pro- vide a much needed review and synthesis of this literature and recent attempts to incorporate insights from ACE into DSGE models. We first review the arguments raised against DSGE in the macroeconomic ACE (macro ACE) literature, and then review existing macro ACE models, their explanatory power and empirical performance. We then turn to the literature on behavioural New Keynesian models that attempts to synthesise these two approaches to macroeconomic modelling by incorporating insights of ACE into DSGE modelling. Finally, we provide a thorough description of the internally rational New Keynesian model, and discuss how this promising line of research can progress.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Jump, R
Date : 14 May 2018
DOI : 10.1111/joes.12249
Copyright Disclaimer : This is the peer reviewed version of an which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions
Uncontrolled Keywords : agent-based computational economics, agent-based macroeconomics, dynamic stochastic general equilibrium models, new Keynesian behavioural models
Depositing User : Melanie Hughes
Date Deposited : 09 May 2018 13:31
Last Modified : 06 Jul 2019 05:25

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