New Approaches to Macroeconomic Modeling: Evolutionary Stochastic Dynamics, Multiple Equilibria, and Externalities as Field Effects
Publish Date: 1998-02-13
Author: Masanao Aoki
This book contributes substantively to the current state of the art of macroeconomic modeling by providing a method for modeling large collections of heterogeneous agents subject to nonpairwise externality called field effects, i.e. feedback of aggregate effects on individual agents or agents using state-dependent strategies. Adopting a level of microeconomic description that keeps track of compositions of fractions of agents by types or strategies , time evolution of the microeconomic states is described by (backward) Chapman-Kolmogorov equations.