Multilevel Interactions with a Keynesian Flavour in a Stochastic Macroeconomic Model

Cycles dragged by switches in preferences are obtained in a stochastic model economy. Both the supply and the demand side, each one of them composed by infinite countable interacting agents, are modelled as dynamic probabilistic processes. Interactions happen at three levels. At a local one, through technological spillovers; at a global one, through preferences spillovers, for the supply and the demand side, respectively; and finally at a mean field level, through rumours producers hear about aggregate demand conditions. Keynesian animal spirits fluctuate as producers perceive that consumers feel more or less confident about their future disposable income. In other words, the way aggregate demand expresses its potentiality drives businessmen's expectations and pushes the economy alternatively towards a 'high-welfare' equilibrium or a 'low-welfare' one.