Edited by Frederic S. Lee and Bruce Cronin
Chapter 13: Agent-based computational economics: simulation tools for heterodox research
This chapter introduces agent-based modeling (ABM) as a research tool that possesses advantages for heterodox research programs. We introduce the approach in four steps. First, we discuss the uniqueness of ABMs, which lies primarily in the flexibility to incorporate vastly heterogeneous agents and to address models with high degrees of freedom. Second, we argue that the flexibility of ABMs makes them an appropriate tool for the questions raised by classical and (post-)Keynesian economists. To demonstrate this point we briefly sketch two ABMs, one which constructs an environment that captures the classical-Marxian processes of gravitation, thereby opening new pathways in value theory, and the other is a nuanced analysis of Keynesian effective demand problems and the existence of chaotic cycles in a capitalist economy. The chapter then revisits the flexibility of ABMs in order to discuss their capability of incorporating dimensions from across the broad variety of heterodox research programs.
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