IDEAS home Printed from https://ideas.repec.org/a/pal/easeco/v43y2017i2d10.1057_eej.2016.2.html
   My bibliography  Save this article

Elements of Dynamic Economic Modeling: Presentation and Analysis

Author

Listed:
  • Leigh Tesfatsion

    (Department of Economics, Iowa State University)

Abstract

The primary goal of these introductory notes is to promote the clear presentation and rigorous analysis of dynamic economic models, whether expressed in equation or agent-based form. A secondary goal is to promote the use of initial-value state-space modeling with its regard for historical process, for cause leading to effect without the external imposition of global coordination constraints on agent actions. Economists who claim to respect individual rationality should not be doing for their modeled economic agents what in reality these agents must do for themselves.

Suggested Citation

  • Leigh Tesfatsion, 2017. "Elements of Dynamic Economic Modeling: Presentation and Analysis," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(2), pages 192-216, March.
    • Handle: RePEc:pal:easeco:v:43:y:2017:i:2:d:10.1057_eej.2016.2
    DOI: 10.1057/eej.2016.2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/eej.2016.2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/eej.2016.2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. H. Uzawa, 1971. "On a Two-Sector Model of Economic Growth," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 3, pages 19-26, Palgrave Macmillan.
    2. James Nicolaisen & Valentin Petrov & Leigh Tesfatsion, 2000. "Market Power and Efficiency in a Computational Electricity Market with Discriminatory Double-Auction Pricing," Computational Economics 0004005, University Library of Munich, Germany.
    3. Tesfatsion, Leigh & Judd, Kenneth L., 2006. "Handbook of Computational Economics, Vol. 2: Agent-Based Computational Economics," Staff General Research Papers Archive 10368, Iowa State University, Department of Economics.
    4. Sinitskaya, Ekaterina & Tesfatsion, Leigh, 2015. "Macroeconomies as constructively rational games," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 152-182.
    5. John B. Davis & D. Wade Hands (ed.), 2011. "The Elgar Companion to Recent Economic Methodology," Books, Edward Elgar Publishing, number 13684.
    6. An, Li, 2012. "Modeling human decisions in coupled human and natural systems: Review of agent-based models," Ecological Modelling, Elsevier, vol. 229(C), pages 25-36.
    7. Leigh Tesfatsion & Kenneth L. Judd (ed.), 2006. "Handbook of Computational Economics," Handbook of Computational Economics, Elsevier, edition 1, volume 2, number 2.
    8. David Kendrick, 2007. "Teaching Computational Economics to Graduate Students," Computational Economics, Springer;Society for Computational Economics, vol. 30(4), pages 381-391, November.
    9. Grimm, Volker & Berger, Uta & DeAngelis, Donald L. & Polhill, J. Gary & Giske, Jarl & Railsback, Steven F., 2010. "The ODD protocol: A review and first update," Ecological Modelling, Elsevier, vol. 221(23), pages 2760-2768.
    10. Axelrod, Robert & Tesfatsion, Leigh, 2006. "A Guide for Newcomers to Agent-Based Modeling in the Social Sciences," Staff General Research Papers Archive 12515, Iowa State University, Department of Economics.
    11. Leigh Tesfatsion, 2011. "Agent-based Modeling and Institutional Design," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(1), pages 13-19.
    12. Hans M. Amman & David A. Kendrick, . "Computational Economics," Online economics textbooks, SUNY-Oswego, Department of Economics, number comp1.
    13. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, April.
    14. Mario J. Miranda & Paul L. Fackler, 2004. "Applied Computational Economics and Finance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633094, April.
    15. Tesfatsion, Leigh, 1986. "Time inconsistency of benevolent government economies," Journal of Public Economics, Elsevier, vol. 31(1), pages 25-52, October.
    16. Tesfatsion, Leigh & Jie, Yu & Rehmann, Chris R. & Gutowski, William J., 2015. "WACCShed: A Platform for the Study of Watersheds as Dynamic Coupled Natural and Human Systems," ISU General Staff Papers 201512160800001226, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erhard Glötzl & Florentin Glötzl & Oliver Richters, 2019. "From constrained optimization to constrained dynamics: extending analogies between economics and mechanics," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 14(3), pages 623-642, September.
    2. Múñoz, Féliz-Fernando & Encinar, María-Isabel & Cañibano, Carolina, 2016. "Agents, interaction, and economic laws: An analytical framework for understanding different economic theories," Working Papers in Economic Theory 2016/05, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    3. Leigh Tesfatsion, 2017. "Modeling economic systems as locally-constructive sequential games," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(4), pages 384-409, October.
    4. Tingting Liu & Randall J. F. Bruins & Matthew T. Heberling, 2018. "Factors Influencing Farmers’ Adoption of Best Management Practices: A Review and Synthesis," Sustainability, MDPI, vol. 10(2), pages 1-26, February.
    5. Thomas Beaussier & Sylvain Caurla & Véronique Bellon Maurel & Eléonore Loiseau, 2019. "Coupling economic models and environmental assessment methods to support regional policies : A critical review," Post-Print hal-02021423, HAL.
    6. Lorraine Eden & Charles F. Hermann & Stewart R. Miller, . "Evidence-based policymaking in a VUCA world," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    7. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201703280700001022, Iowa State University, Department of Economics.
    8. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201702180800001022, Iowa State University, Department of Economics.
    9. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201704300700001022, Iowa State University, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201704300700001022, Iowa State University, Department of Economics.
    2. Leigh Tesfatsion, 2017. "Modeling economic systems as locally-constructive sequential games," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(4), pages 384-409, October.
    3. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201703280700001022, Iowa State University, Department of Economics.
    4. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201702180800001022, Iowa State University, Department of Economics.
    5. An, Li & Grimm, Volker & Sullivan, Abigail & Turner II, B.L. & Malleson, Nicolas & Heppenstall, Alison & Vincenot, Christian & Robinson, Derek & Ye, Xinyue & Liu, Jianguo & Lindkvist, Emilie & Tang, W, 2021. "Challenges, tasks, and opportunities in modeling agent-based complex systems," Ecological Modelling, Elsevier, vol. 457(C).
    6. Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    7. John Stachurski, 2009. "Economic Dynamics: Theory and Computation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012774, April.
    8. Junjie Sun & Leigh Tesfatsion, 2007. "Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework," Computational Economics, Springer;Society for Computational Economics, vol. 30(3), pages 291-327, October.
    9. Zhangqi Zhong & Lingyun He, 2022. "Macro-Regional Economic Structural Change Driven by Micro-founded Technological Innovation Diffusion: An Agent-Based Computational Economic Modeling Approach," Computational Economics, Springer;Society for Computational Economics, vol. 59(2), pages 471-525, February.
    10. Tesfatsion, Leigh & Jie, Yu & Rehmann, Chris R. & Gutowski, William J., 2015. "WACCShed: A Platform for the Study of Watersheds as Dynamic Coupled Natural and Human Systems," ISU General Staff Papers 201512160800001226, Iowa State University, Department of Economics.
    11. Huber, Robert & Bakker, Martha & Balmann, Alfons & Berger, Thomas & Bithell, Mike & Brown, Calum & Grêt-Regamey, Adrienne & Xiong, Hang & Le, Quang Bao & Mack, Gabriele & Meyfroidt, Patrick & Millingt, 2018. "Representation of decision-making in European agricultural agent-based models," Agricultural Systems, Elsevier, vol. 167(C), pages 143-160.
    12. repec:spo:wpmain:info:hdl:2441/5qr7f0k4sk8rbq4do5u6v70rm0 is not listed on IDEAS
    13. repec:hal:spmain:info:hdl:2441/5qr7f0k4sk8rbq4do5u6v70rm0 is not listed on IDEAS
    14. Paul L. Borrill & Leigh Tesfatsion, 2011. "Agent-based Modeling: The Right Mathematics for the Social Sciences?," Chapters, in: John B. Davis & D. Wade Hands (ed.), The Elgar Companion to Recent Economic Methodology, chapter 11, Edward Elgar Publishing.
    15. repec:hal:spmain:info:hdl:2441/3kbkotqp1b85pa2lu2puri38p6 is not listed on IDEAS
    16. Coronese, Matteo & Occelli, Martina & Lamperti, Francesco & Roventini, Andrea, 2023. "AgriLOVE: Agriculture, land-use and technical change in an evolutionary, agent-based model," Ecological Economics, Elsevier, vol. 208(C).
    17. Flaminio Squazzoni, 2010. "The impact of agent-based models in the social sciences after 15 years of incursions," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(2), pages 197-234.
    18. Furtado, Bernardo Alves & Eberhardt, Isaque Daniel Rocha, 2015. "Modelo espacial simples da economia: uma proposta teórico-metodológica [A simple spatial economic model: a proposal]," MPRA Paper 67005, University Library of Munich, Germany.
    19. Mellár, Tamás & Hau, Orsolya & Sebestyén, Tamás, 2013. "Láthatóvá tehető-e a láthatatlan kéz? Egy ágensalapú piaci modell tapasztalatai [Can the invisible hand be rendered visible? Experiences of an agent-based market model]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 992-1024.
    20. Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Joseph E. Stiglitz & Tania Treibich, 2020. "Rational Heuristics? Expectations And Behaviors In Evolving Economies With Heterogeneous Interacting Agents," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1487-1516, July.
    21. David Kendrick, 2007. "Teaching Computational Economics to Graduate Students," Computational Economics, Springer;Society for Computational Economics, vol. 30(4), pages 381-391, November.
    22. repec:hal:spmain:info:hdl:2441/5rtilga41c899ab0rctd3cp2r3 is not listed on IDEAS
    23. João Bernardino & Tanya Araújo, 2013. "On positional consumption and technological innovation: an agent-based model," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1047-1071, November.
    24. Sinitskaya, Ekaterina & Tesfatsion, Leigh, 2015. "Macroeconomies as constructively rational games," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 152-182.

    More about this item

    Keywords

    state-space modeling; differential/difference equations; agent-based computational economics; presentation; analysis;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:easeco:v:43:y:2017:i:2:d:10.1057_eej.2016.2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.