Ants and Nonoptimal Self-Organization

Lessons for Macroeconomics

Bibliographic Data

ID19037795
AuthorsAlan Kirman (0000-0002-4152-6522, corresponding author)
Year2014
Volume20
Issue2
Pages601-621
Publication date2014-09-18
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueMacroeconomic Dynamics (JOURNAL)
Journal identifiersISSN: 1365-1005 • E-ISSN: 1469-8056
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s1365100514000339
OpenAlexW2160758148
LanguageEN
Citations received3
References cited28

This paper suggests that we need an alternative approach to economic modeling in general, and macroeconomic modeling in particular, if we are to capture salient characteristics of recent economic developments. Rather than focusing on models built on the basis of isolated, rational, optimizing agents, we should recognize that much simpler individuals following basic rules can collectively generate complex behavior. We have lessons to learn from studying the behavior of social insects for example. Noisy systems of interactive agents can generate aggregate phenomena such as sudden changes in the state of an economy or market, with no external shock. I give two examples of simple models of financial markets to illustrate this but would argue more generally that such models are indispensible if we are to understand aggregate economic phenomena

Aggregate behavior · Aggregate demand · Economic model · Economics · General equilibrium theory · Macroeconomics · Microeconomics · Monetary policy · Rational expectations · Salient · Complex Systems and Time Series Analysis · Computer Science · Economic theories and models · Game Theory and Applications · Artificial Intelligence

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