The Great Recession seems to be a natural experiment for economic analysis, in that it has shown the inadequacy of the predominant theoretical framework - the New Neoclassical Synthesis (NNS) - grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical,...

Ever since the emergence of economics as a distinct scientific discipline, policy makers have turned to economic models to guide policy interventions. If policy makers seek to enhance growth of an open capitalist economy, they have to take into account, firstly, the uncertainties,...

Ever since the emergence of economics as a distinct scientific discipline, policy makers have turned to economic models to guide policy interventions. If policy makers seek to enhance growth of an open capitalist economy, they have to take into account, firstly, the uncertainties,...

Demographic change belongs to the mega-trends of the 20th and the 21st century. The ongoing aging process in major industrialized countries gives rise to the relative scarcity of raw labor and the relative abundance of physical capital. Standard macroeconomic models suggest that this depresses...

This paper develops an agent-based model(ABM) to replicate financial instability, such as bubbles and crashes in asset markets, by introducing a simple idea of ‘heterogeneous expectation’ by which agents have different expectations about a ‘tipping point’ where they expect the price to...