A new approach to business fluctuations: Heterogeneous interacting agents, scaling laws and financial fragility

Gatti, DD; Di Guilmi, C; Gaffeo, E; Giulioni, G; Gallegati, M; Palestrini, A

A new approach to business fluctuations: Heterogeneous interacting agents, scaling laws and financial fragility

Gatti, DD Di Guilmi, C

Gaffeo, E Giulioni, G Gallegati, M Palestrini, A

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Publication Type:: Journal Article
Citation:: Journal of Economic Behavior and Organization, 2005, 56 (4 SPEC. ISS.), pp. 489 - 512
Issue Date:: 2005-01-01

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Field	Value	Language
dc.contributor.author	Gatti, DD	en_US
dc.contributor.author	Di Guilmi, C https://orcid.org/0000-0001-7786-039X	en_US
dc.contributor.author	Gaffeo, E	en_US
dc.contributor.author	Giulioni, G	en_US
dc.contributor.author	Gallegati, M	en_US
dc.contributor.author	Palestrini, A	en_US
dc.date.issued	2005-01-01	en_US
dc.identifier.citation	Journal of Economic Behavior and Organization, 2005, 56 (4 SPEC. ISS.), pp. 489 - 512	en_US
dc.identifier.issn	0167-2681	en_US
dc.identifier.uri	http://hdl.handle.net/10453/10002
dc.description.abstract	In this paper, we discuss a scaling approach to business fluctuations. Our starting point consists in recognizing that concepts and methods derived from physics have allowed economists to (re)discover a set of stylized facts which have to be satisfactorily accounted for in their models. Standard macroeconomics, based on a reductionist approach centered on the representative agent, is definitely badly equipped for this task. On the contrary, we show that a simple financial fragility agent-based model, based on complex interactions of heterogeneous agents, is able to replicate a large number of scaling type stylized facts with a remarkable high degree of statistical precision. © 2004 Elsevier B.V. All rights reserved.	en_US
dc.relation.ispartof	Journal of Economic Behavior and Organization	en_US
dc.relation.isbasedon	10.1016/j.jebo.2003.10.012	en_US
dc.subject.classification	Economics	en_US
dc.title	A new approach to business fluctuations: Heterogeneous interacting agents, scaling laws and financial fragility	en_US
dc.type	Journal Article
utslib.citation.volume	4 SPEC. ISS.	en_US
utslib.citation.volume	56	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	4 SPEC. ISS.	en_US
pubs.publication-status	Published	en_US
pubs.volume	56	en_US

Abstract:

In this paper, we discuss a scaling approach to business fluctuations. Our starting point consists in recognizing that concepts and methods derived from physics have allowed economists to (re)discover a set of stylized facts which have to be satisfactorily accounted for in their models. Standard macroeconomics, based on a reductionist approach centered on the representative agent, is definitely badly equipped for this task. On the contrary, we show that a simple financial fragility agent-based model, based on complex interactions of heterogeneous agents, is able to replicate a large number of scaling type stylized facts with a remarkable high degree of statistical precision. © 2004 Elsevier B.V. All rights reserved.

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http://hdl.handle.net/10453/10002