Macroeconomics from the Bottom-up (repost)
Domenico Delli Gatti, Saul Desiderio, Edoardo Gaffeo, Pasquale Cirillo, "Macroeconomics from the Bottom-up"
Spr,..r | 2011 | ISBN: 8847019702 | 136 pages | PDF | 1,4 MB
Spr,..r | 2011 | ISBN: 8847019702 | 136 pages | PDF | 1,4 MB
This book arose from our conviction that the NNS-DSGE approach to the analysis of aggregate market outcomes is fundamentally flawed. The practice of overcoming the SMD result by recurring to a fictitious RA leads to insurmountable methodological problems and lies at the root of DSGE models’ failure to satisfactorily explain real world features, like exchange rate and banking crises, bubbles and herding in financial markets, swings in the sentiment of consumers and entrepreneurs, asymmetries and persistence in aggregate variables, and so on. At odds with this view, our critique rests on the premise that any modern macroeconomy should be modeled instead as a complex system of heterogeneous interacting individuals, acting adaptively and autonomously according to simple and empirically validated rules of thumb. We call our proposed approach Bottom-up Adaptive Macroeconomics (BAM).