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FINANCIAL FRAGILITY, INDUSTRIAL DYNAMICS, AND BUSINESS FLUCTUATIONS IN AN AGENT-BASED MODEL

Published online by Cambridge University Press:  05 July 2007

DOMENICO DELLI GATTI ,
CORRADO DI GUILMI ,
MAURO GALLEGATI  and
GIANFRANCO GIULIONI
DOMENICO DELLI GATTI
Affiliation:
ITEMQ, Università Cattolica del Sacro Cuore
CORRADO DI GUILMI
Affiliation:
DEA, Università Politecnica delle Marche
MAURO GALLEGATI
Affiliation:
DEA, Università Politecnica delle Marche
GIANFRANCO GIULIONI
Affiliation:
DMQTE, Università “G. d'Annunzio” di Chieti-Pescara
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Abstract

In this paper we present and discuss a simple financial accelerator agent-based model, whose conceptual core is the interaction of heterogeneous firms and the banking system. Its simplicity notwithstanding, the model is able to replicate through simulations a large number of stylized facts concerning the shape and evolution over time of the distribution of firms' sizes, growth rates, profits, and “bad debt.”

Keywords

Business FluctuationsPower Law DistributionFirms' Sizes DistributionAgent-Based Model
Type
ARTICLES
Information
Macroeconomic Dynamics , Volume 11 , Supplement S1: Interacting Agents and Market Behavior , November 2007 , pp. 62 - 79
Copyright
© 2007 Cambridge University Press

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