tag:blogger.com,1999:blog-4039434.post510257954448221232..comments2024-02-26T06:46:53.171-05:00Comments on Rajiv Sethi: The Agent-Based MethodRajivhttp://www.blogger.com/profile/13667685126282705505noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-4039434.post-49360137673707745552014-10-18T17:59:22.033-04:002014-10-18T17:59:22.033-04:00Diego, you can have multiple equilibrium paths in ...Diego, you can have multiple equilibrium paths in a DSGE (the indeterminacy literature exploits this feature) and you can have shock persistence and hysteresis too. So the methodology doesn't rule out these phenomena. The key difference, as Leigh explains so well, is that coordination is simply assumed in a DSGE, as part and parcel or the equilibrium hypothesis, whereas in an ABM coordination can only come about through decentralized adjustment in the face of disequilibrium. In particular, the rational expectations hypothesis imposes a level of coordination in beliefs across individuals that would be inadmissible in an ABM. Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-59556502240923630892014-10-18T13:59:03.931-04:002014-10-18T13:59:03.931-04:00Can DGSE models even exhibit path dependence? I w...Can DGSE models even exhibit path dependence? I wonder if just on that non-ergodicity score they are apples to ABM oranges. <br />Diegohttps://www.blogger.com/profile/18084671738464414141noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-21350768415609225672014-08-21T10:59:26.048-04:002014-08-21T10:59:26.048-04:00One can have market clearing without mutual consis...One can have market clearing without mutual consistency of plans (as in Hicksian temporary equilibrium) or rationing with complete consistency of plans (as in fixed price models of the type you mentioned). Agent-based models of financial markets will typically be of the first type since prices are flexible.Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-71672129198860546962014-08-20T12:29:22.117-04:002014-08-20T12:29:22.117-04:00Thanks, Rajiv. I'll take another look. I was...Thanks, Rajiv. I'll take another look. I was assuming that rationed buyers and/or sellers imply that plans weren't mutually consistent.Anonymoushttps://www.blogger.com/profile/11677815746117897839noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-20890992769227411152014-08-20T09:45:13.307-04:002014-08-20T09:45:13.307-04:00Certainly ABM's can accommodate absence of mar...Certainly ABM's can accommodate absence of market clearing but if I remember right the Malinvaud-type models assumed rational expectations and hence mutually consistent plans. Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-26306811392585878002014-08-20T00:44:10.663-04:002014-08-20T00:44:10.663-04:00"What you cannot have in an ABM is the assump..."What you cannot have in an ABM is the assumption that, from the outset, individual plans are mutually consistent. That is, you cannot simply assume that the economy is tracing out an equilibrium path."<br /><br />What's wrong with most of contemporary macro summed up in two magnificent sentences. Bravo! Could the disequilibrium macro of Grandmont, Malinvaud, et al, be explored via ABM?Anonymoushttps://www.blogger.com/profile/11677815746117897839noreply@blogger.com