by Mauro Gallegati (Author)
About the Author
Mauro Gallegati is Professor of Economics at the Polytechnic University of Marche, Ancona, Italy. His research areas include business fluctuations, nonlinear dynamics, models of financial fragility, and heterogeneous interacting agents. He has published books and many papers in leading journals in the fields of economics, economic history and history of economic analysis, nonlinear mathematics, applied economics, complexity, and econophysics. He has been involved in a number of international research projects.
About this book
This book offers a thorough introduction to the highly promising complex agent-based approach to economics, in which agent-based models (ABMs) are used to represent economic systems as complex and evolving systems composed of heterogeneous agents of limited rationality who interact with each other, generating the system’s emergent properties in the process.
This approach represents a response to the limitations of the dominant theory in economics, which does not consider the possibility of a major crisis, and to the inability of dynamic stochastic general equilibrium theory to generate empirically falsifiable propositions. In the new perspective, the focus is on identifying the elements of instability rather than the triggering event. As the theory of complexity demonstrates, the interactions of heterogeneous agents produce non-linearity: this puts an end to the age of certainties.
With ABMs, the methodology is “from the bottom up”. The individual parameters and their distribution are estimated, and then evaluated to verify whether aggregate regularities emerge on the whole. In short, not only micro, but also meso and macro empirical validation are employed. Moreover, it shows that the mantra of growth should be supplanted by the concept of a growth.
Given its depth of coverage, the book will enable students at the undergraduate and Master’s level to gain a firm grasp of this important emerging approach.
Table of contents
1 Axiomatic Economics: The Biggest Dying Paradigm 1
1. 1 A Clock That Always Marks the Same Hour 2
1. 2 GDP Versus Well-Being 5
1.3 The Agrowth Hamster Roams the World 10
2 The Crisis of Economics 17
2. 1 Children and Fools Imagine Reality: And Also, Sometimes, Queens 18
2. 2 Economy “Ad Usum Delphini,” Even Though We’re Hamsters 21
2. 3 Sediments of History and Not Falsifiability 25
2. 4 Applying Newton’s Theory to the Movement of Electrons (and Attributing the Failure to the Imperfection of Reality) 31
2. 5 Economics Is a Science, UFOs Are Spying on Us and Cats Bark 34
3 A Rather Unusual History 37
3. 1 From Axioms to Hypotheses 42
3. 2 Models with Heterogeneous Interacting Agents: An Escape Route from Axiomatic Economics 46
3. 3 The Cumbersome Political Economics of Complexity 54
4 Where Do We Go, to Go Where We Have to Go? 61
4. 1 A Paradigm Shift 61
4. 2 The House Is on Fire, But I’ll Use the Only Bucket of Water Left to Have a Shower 62
4. 3 Dilettantes at Work 64
4. 4 By Way of Conclusion 67
References 71
Series: New Economic Windows
Length: 80 pages
Publisher: Springer; 1st ed. 2018 edition (October 24, 2018)
Language: English
ISBN-10: 3319938576
ISBN-13: 978-3319938578
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