Agent-Based and Behavioral Macroeconomics

Wintersemester 2023/24

Learning Goals

By the end of this course, students will accomplish the following learning objectives:

1. Understanding Complex Agent-Based Macroeconomic Models: Students will be capable of recognizing the key features of complex agent-based macroeconomic models and comprehending their practical applications in the field.
2. Distinguishing Complexity Approach from Traditional Models: Students will develop a clear understanding of the differences between the complexity approach to economics and conventional mathematical or equilibrium models. They will be able to identify and critically assess the fundamental assumptions and theoretical frameworks that distinguish these approaches.
3. Gaining Insights into Behavioral Economics: Students will acquire insights into how Behavioral Economics contributes to the complexity approach in economics. They will learn how behavioral insights are integrated into macroeconomic models and how these insights impact economic analysis.
4. Recognizing the Significance of Behavioral Economics in Modern Macroeconomics: Students will gain an appreciation for the role of Behavioral Economics in shaping contemporary macroeconomics. They will understand how behavioral perspectives influence economic policy formulation and decision-making.

Prerequisites

The prerequisite for this course is a basic to intermediate level of knowledge in macroeconomics. Additionally, students are expected to have very good English language skills. A genuine interest in macroeconomic research is required to participate and succeed in this module.

Class Policy

Consistent attendance is mandatory and deemed crucial for this course. Furthermore, active involvement in classroom discussions is expected and highly encouraged. Students are expected to engage in thoughtful exchanges with peers and contribute constructively to the collective learning experience.

Final Exam

Written exam on Friday, March 1st 2024. Further details on the exam will be provided in due time.

Course Outline

17.10.23: Introduction to course - - preparation - general info

24.10.2023 Lecture 1: Introduction to Macroeconomic Paradigms

• Overview of the course objectives and learning outcomes.
• Introduction to the evolution of macroeconomic thought.
• Brief exploration of the ”Behavioral Revolution” and its impact on macroeconomics.

07.11.2023 Lecture 2: Historical Foundations of Macroeconomics

• Delving deeper into the historical shifts in macroeconomic paradigms.
• Examining key figures and ideas that shaped the field.

14.11.2023 Lecture 3: Neoclassical Macroeconomics

• In-depth analysis of Neoclassical macroeconomic models.
• Understanding the principles and assumptions underlying these models.

21.11.2023 Lecture 4: Introduction to Behavioral Economics

• Introduction to the fundamentals of Behavioral Economics.
• Key concepts and principles of behavioral insights.

28.11.2023 Lecture 5: Comparative Analysis: Neoclassical vs. Behavioral Macroeconomics

• A comprehensive comparison between Neoclassical and Behavioral macroeconomic approaches.
• Identifying their respective strengths and weaknesses.

05.12.2023 Lecture 6: Behavioral Insights in Macroeconomic Analysis

• Examining how Behavioral Economics contributes to modern macroeconomic analysis.
• Understanding the integration of behavioral insights into macroeconomic models.

12.12.2023 Lecture 7: Agent-Based Modeling in Macroeconomics: Basics

• Introduction to agent-based modeling.
• Understanding the basics of agent-based macroeconomic models.

19.12.2023 Lecture 8: Agent-Based Modeling Applications

• Exploration of practical applications of agent-based models in macroeconomics.
• Case studies and examples illustrating their real-world use.

09.01.2024 Lecture 9: Complexity Theory and Economic Models

• Exploring the relationship between complexity theory and economic models.
• Discussing the advantages and limitations of complexity-based approaches.

16.01.2024 Lecture 10: Complexity-Based Approaches: Case Studies

• In-depth examination of case studies in complexity economics.
• Analyzing how complexity theory has been applied to address economic issues.

23.01.2024 Lecture 11: Current Debates in Macroeconomics

• Engaging with current debates and controversies in macroeconomics.
• Discussion of emerging trends and research areas in the field.

30.01.2023: Course Recap and Synthesis

Main Bibliographic References

This is a restricted list of papers to be touched on during the course. Additional resources will be made available during the course.

• Arthur, B. A. (2013). Complexity Economics: A Different Framework for Economic Thought. SFI working paper 2013-04-012, Santa Fe Institute.
• D'Orazio, P. (2017). Big data and complexity: Is macroeconomics heading toward a new paradigm? Journal of Economic Methodology 24(4), 410-429.
• Fontana, M. (2010). Can Neoclassical economics handle complexity? The fallacy of the oil spot dynamic. Journal of Economic Behavior & Organization 76(3), 584-596.
• Kirman, A. P. (1992). Whom or What Does The Representative Individual Represent. Journal of Economic Perspective 6, 117-36.