Micro and macro policies in the Keynes+Schumpeter evolutionary models

By Giovanni Dosi, Mauro Napoletano, Andrea Roventini, Tania Treibich. Journal of evolutionary economics, 2016

112 citations recorded by the source corpus.

This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, J Econ Dyn Control 34 1748–1767 2010, J Econ Dyn Control 37 1598–1625 2013, J Econ Dyn Control 52 166–189 2015) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) and Keynesian (demand-related) policies in ensuring that the economic system follows a path of sustained stable growth and employment.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/e64db915d33d99aeef91203dce33c22342e81606

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Citations in the corpus

Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model (2018, methodology): “It builds on Dosi et al. (2010, 2013, 2016) and extends the Keynes+Schumpeter (K+S) family of models, which account for endogenous growth, business cycles and crises.”
Economic Forecasting with an Agent-Based Model (2020, background): “Macroeconomic ABMs typically replicate a number of macroeconomic and microeconomic empirical stylized facts, such as time series properties of output fluctuations and growth, as well as cross-sectional distributional characteristics of firms (Dosi et al., 2017; Axtell, 2018).”
More is different ... and complex! the case for agent-based macroeconomics (2019, background): “Non-exhaustive lists of micro and macro stylized facts jointly accounted by macro agent-based models are reported in Haldane and Turrell (2019) in this special issue and Dosi et al. (2016a, 2018b).”
Three green financial policies to address climate risks (2021, background): “…change can direct the pattern of growth, but, at the same time, recessions can affect the long-run performance of the economy via hysteresis effects (Blanchard et al., 2015; Dosi et al., 2017) Second, the model matches cointegration relationships between output, energy demand and emissions.”