Emergent Macroeconomics

1. Front Matter

   Pages I-XII

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2. Crucial Issues

   Pages 1-9

3. Stylized Facts of Industrial Dynamics: The Distribution of Firms’ Size

   Pages 11-31

4. Stylized Facts in Industrial Dynamics: Exit, Productivity, Income

   Pages 33-60

5. An Agent-based Model

   Pages 61-93

6. Where Do We Go from Here?

   Pages 95-103

7. Back Matter

   Pages 105-114

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by exploiting the disequilibrium and non linear relationships among economic aggregates. Prom an empirical point of view, this approach resemblaces the old NBER view, according to which: "the business cycle [. . . ] consists of - pansions occurring at about the same time in many economic activities, f- lowed by similairly general recessions, contractions, and revivals which merge into the expansion phase of the next cyxle" (Burns and Mitchell, 1946). They add that the movement, although recurrent, is not periodic, lasting from 1 to 12 years, and it is not divisible into shorter cycles. Of course, both approaches are not free from limits and inconsistencies. In spite of the equilibrium approach having nowadays became the workhorse of modern macroeconomics, for example, their users still find enormous d- ficulties in explaining why small shocks produce large fluctuations. A well known argument in multi sector real business cycle models (see e. g. Long and Plosser, 1983) is that as the number of sectors or industries considered in the analysis becomes large, aggregate volatility must tend to zero very quickly. This result, which follows directly from the Law of Large Numbers (LLN), rests on the hypothesis that each sector is periodically buffeted with idiosyncratic, identically and independently distributed shocks to Total F- tor Productivity (TFP).

• agent based computational economics
• business cycle
• economic growth
• financial fragility
• firms' size distribution
• power laws

• Catholic University of Milan, Italy

  Domenico Delli Gatti

• University of Trento, Italy

  Edoardo Gaffeo

• Polytechnic University of Marche, Ancona, Italy

  Mauro Gallegati

• University “G. d’Annunzio”, Pescara, Italy

  Gianfranco Giulioni

• University of Teramo, Italy

  Antonio Palestrini

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