What I cannot create, I do not understand.|
Richard Feynman (1988)
Jamel (Java Agent-based Macro-Economic Laboratory) is an open source agent-based
framework dedicated to the modeling, the simulation and the analysis of complex monetary
The latest version of Jamel (20160509) is available as a downloadable application.
It contains the companion baseline simulation of the paper "Is the market really a good teacher? Market selection, collective adaptation and financial instability" (2016).
Published in Industrial and Corporate Change (available online at: https://doi.org/10.1093/icc/dty011, pre-print version available on <RePEc> )
What drives markups?
Evolutionary pricing in an agent-based stock-flow consistent macroeconomic model
Pascal Seppecher, Isabelle Salle, Marc Lavoie
This article studies coordination between firms in a multi-sectoral macroeconomic model with endogenous business cycles. Firms are both in competition and interdependent, and set their prices with a markup over unit costs. Markups are heterogeneous and evolve under market pressure. We observe a systematic coordination between firms of each sector, and between each sector. The resulting pattern of relative prices is fairly consistent with the labor theory of value. These emerging features are robust to technology shocks.
Keywords: General interdependence, Pricing, Agent-based modeling, Learning.
JEL classification codes: E12, L16, L11, D46, C63.
Slides (AFEP 2017)
Published in the Journal of Evolutionary Economics (available online at: https://doi.org/10.1007/s00191-018-0571-7, pre-print version available on <RePEc> , "Must-Read" on Brad DeLong's blog)
Is the market really a good teacher?
Market selection, collective adaptation
and financial instability
Pascal Seppecher, Isabelle Salle, Dany Lang
This paper proposes to model market mechanisms as a collective learning process for firms in a complex adaptive system, namely Jamel, an agent-based, stock-flow consistent macroeconomic model. Inspired by Alchian's (1950) "blanketing shotgun process" idea, our learning model is an ever-adapting process that puts a significant weight on exploration vis-à-vis exploitation. We show that decentralized market selection allows firms collectively to adapt their overall debt strategies to the changes in the macroeconomic environment so that the system sustains itself, but at the cost of recurrent deep downturns. We conclude that, in complex evolving economies, market processes do not lead to the selection of optimal behaviors, as the characterization of successful behaviors itself constantly evolves as a result of the market conditions that these behaviors contribute to shaping. Heterogeneity in behavior remains essential to adaptation. We come to an evolutionary characterization of a crisis, as the point where the evolution of the macroeconomic system becomes faster than the adaptation capabilities of the agents that populate it.
Keywords: Evolutionary economics, Learning, Firms' adaptation, Business cycles.
JEL classification codes: B52, C63, D21, D83, E32.
Last updated: 2018-06-23