Difference between revisions of "Papers on Economic Agent-Based simulation"

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==Non-Walrasian Equilibrium: Illustrative Examples==
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Paper by Tesfatsion (7/31/08)
 
 
 
*Do all markets always clear, or can there be equilibrium without total market clearing?
 
*Keynesian equilibrium
 
**Those with incentive to change state have no power to, those who have power to change stare have no incentive
 
**Multiple possible equilibrium states
 
*Signaling problems
 
**Incomplete signaling
 
***Do not signal what future actions might be, so others have to make investment decisions that might be wrong
 
**Signaling not credible
 
***Even if signal today, not credible unless backed today by purchasing power
 
*Dynamic Stochastic General Equilibrium (DSGE) Model
 
**Allows disequilibrium, due to shocks
 
**Equilibrium would exist without shocks
 
**Tends toward equilibrium in the long run
 
*Involuntary Unemployment
 
**Wage/labor not in equilibrium
 
**Those with incentive to change state have no power to, those who have power to change stare have no incentive
 
***Unemployment equilibrium
 
**Optimism/pessimism about future signals can affect this equilibrium
 
*Demand Signaling
 
**How do customers signal future demand?
 
**Need current purchasing power to
 
**Liquidity constraints
 
**Clower: liquidity and credit constraints can lead to persistent involuntary unemployment due to signaling problems
 
***People can’t work as much as they want
 
***Can’t borrow vs. future income
 
*Effective Equilibrium
 
**Holds given
 
***Consumer and firm on effective demand and supply curves
 
***All price and dividend expectations are fulfilled
 
***Effective supply is at least at great as effective demand
 
**Firm as price taker in wage
 
***Would not lower unless perceived high employment supply
 
*Coordination Failure
 
**Mutual gains not realized because no individual has incentive to change from current behavior
 
**Can be Nash Equilibrium, but not Pareto efficient
 
 
 
The paper can be found [http://www.econ.iastate.edu/tesfatsi/nonwalra.pdf here].
 
 
 
 
 
  
 
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