Behavioural Macro and Complexity
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Teacher(s)
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Research fieldComplexity
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DatesPeriod 5 - May 03, 2021 to Jul 16, 2021
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Course typeField
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Program yearFirst
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Credits3
Course description
The leading paradigm in macroeconomics assumes that economic agents (households, firms, investors) are perfectly rational in making their decisions. Experimental evidence and common sense indicate that this assumption is often too demanding. This course focuses on the analysis of macroeconomic models under bounded rationality, where agents violate full rationality but behave more in accordance with experimental evidence. The economy is viewed as a complex system with interacting boundedly rational heterogeneous agents. A central question will be: which emerging aggregate macro behavior arises through the interactions of individual decisions of boundedly rational heterogeneous agents at the micro level?
Prerequisites
Course literature
Primary reading
- C.H. Hommes (2013). Behavioral Rationality and
Heterogeneous Expectations in Complex Economic Systems, Cambridge University
Press,
http://www.cambridge.org/gb/knowledge/isbn/item694...
Further Reading
- De Grauwe, P. (2012). Lectures on Behavioral
Macroeconomics, Princeton University Press, http://press.princeton.edu/titles/9891.html
- C.H. Hommes (2021), Behavioral &
Experimental Macroeconomics and Policy Analysis: a Complex Systems Approach,
Journal of Economic Literature, forthcoming.
- Selected papers