Output dynamics and (s, S) strategies in an agent based macroeconomic model

Oscar Alonso, Hiroshi Deguchi, Yuhsuke Koyama

Research output: Contribution to conferencePaper

Abstract

A well known result from (Caplin and Spulber 1987) shows that even in the presence of price rigidity, aggregated product of an economy may be unaffected by changes in the money supply. Here we relax the assumptions of continuity of such result by using agent based simulation, and analyzing the dynamics of output under such conditions. We show that in the agent-based version of the model money is no longer neutral and cyclic dynamics emerge. Such dynamics is influenced mainly by expectations of income, expectations of inflation, and implementations of (s, S) strategies. Oscillations in output grow stronger as the economy departs from initial equilibrium conditions.

Original languageEnglish
Pages227-231
Number of pages5
Publication statusPublished - 2010 Jan 1
Externally publishedYes
Event24th Annual European Simulation and Modelling Conference, ESM 2010 - Hasselt, Belgium
Duration: 2010 Oct 252010 Oct 27

Other

Other24th Annual European Simulation and Modelling Conference, ESM 2010
CountryBelgium
CityHasselt
Period10/10/2510/10/27

Keywords

  • (s, S) Strategies
  • Agent-Based Macroeconomics
  • Monetary Neutrality

ASJC Scopus subject areas

  • Modelling and Simulation

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    Alonso, O., Deguchi, H., & Koyama, Y. (2010). Output dynamics and (s, S) strategies in an agent based macroeconomic model. 227-231. Paper presented at 24th Annual European Simulation and Modelling Conference, ESM 2010, Hasselt, Belgium.