Towards an Agent-Based Model for the Analysis of Macroeconomic Signals

Abstract

This work introduces an agent-based model for the analysis of macroeconomic signals. The Bottom-up Adaptive Model (BAM) deploys a closed Walrasian economy where three types of agents (households, firms and banks) interact in three markets (goods, labor and credit) producing some signals of interest, e.g., unemployment rate, GDP, inflation, wealth distribution, etc. Agents are bounded rational, i.e., their behavior is defined in terms of simple rules finitely searching for the best salary, the best price, and the lowest interest rate in the corresponding markets, under incomplete information. The markets define fixed protocols of interaction adopted by the agents. The observed signals are emergent properties of the whole system. All this contrasts with the traditional macroeconomic approach based on the general equilibrium model, where perfect rationality and/or full information availability are assumed. The model is defined following the Overview, Design concepts, and Details Protocol and implemented in NetLogo. BAM is promoted as a toolbox for studying the macroeconomic effects of the agent activities at the service of the elaboration of public policies.