Economic policy-making tools for pre- and post-crisis periods

by Zakaria Babutsidze and Mauro Napoletano

The worldwide financial crisis has questioned the relevance of economic models that are currently used by central bankers and macro analysts. In contrast, the recent economic events seem to be better described by models featuring boundedly rational heterogeneous agents and wherein markets do not necessarily clear at all times. Agent Based Models (ABMs) are a new class of models that embed all the above features, and therefore qualify as a promising alternative to conventional models. Continue reading “Economic policy-making tools for pre- and post-crisis periods”

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