Journal article
Zachary B. Kessler
Cite
Cite
APA
Kessler, Z. B. A New Economic Cybernetics: Computational Institutions Applied to Behavioral Macroeconomic Models.
Chicago/Turabian
Kessler, Zachary B. “A New Economic Cybernetics: Computational Institutions Applied to Behavioral Macroeconomic Models” (n.d.).
MLA
Kessler, Zachary B. A New Economic Cybernetics: Computational Institutions Applied to Behavioral Macroeconomic Models.
Abstract
Economic cybernetics, a long dormant field, remains ignored in the traditional discussions of policy, politics, and economic dynamics. Pioneered by Oskar Lange, the approach largely declines with his failings in the calculation debate due to their inherent connection. This project proposes a revitalization is needed given the rise of modern computational capabilities that allow for the modeling of not only agents in the economy but also simultaneously those determining policy. In this paper I will develop a framework for programming institutions as computational algorithms meant to mechanistically regulate interactions between market and political agents. This methodology is then used to directly compare the outcomes of a behavioral New Keynesian macroeconomic model under differing programmed institutions to determine their performance in endogenously selecting optimal policy in a series of Monte Carlo simulations.
Economic cybernetics, a long dormant field, remains ignored in the traditional discussions of policy, politics, and economic dynamics. Pioneered by Oskar Lange, the approach largely declines with his failings in the calculation debate due to their inherent connection. This project proposes a revitalization is needed given the rise of modern computational capabilities that allow for the modeling of not only agents in the economy but also simultaneously those determining policy. In this paper I will develop a framework for programming institutions as computational algorithms meant to mechanistically regulate interactions between market and political agents. This methodology is then used to directly compare the outcomes of a behavioral New Keynesian macroeconomic model under differing programmed institutions to determine their performance in endogenously selecting optimal policy in a series of Monte Carlo simulations.