Computational economics

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Computational economics is a research discipline at the interface of computer science, economics, and management science.[1] This subject encompasses computational modeling of economic systems, whether agent-based,[2] general-equilibrium,[3] macroeconomic,[4] or rational-expectations,[5] computational econometrics and statistics,[6] computational finance, computational tools for the design of automated internet markets, programming tool specifically designed for computational economics and the teaching of computational economics; some of these areas are unique, while others extend traditional areas of economics by solving problems that are tedious to study without computers and associated numerical methods.[7]

Computational economics uses computer-based economic modelling for the solution of analytically and statistically- formulated economic problems. A research program, to that end, is agent-based computational economics (ACE), the computational study of economic processes, including whole economies, as dynamic systems of interacting agents;[8] as such, it is an economic adaptation of the complex adaptive systems paradigm.[9] Here the "agent" refers to "computational objects modeled as interacting according to rules," not real people.[2] Agents can represent social, biological, and/or physical entities; the theoretical assumption of mathematical optimisation by agents in equilibrium is replaced by the less restrictive postulate of agents with bounded rationality adapting to market forces,[10] including game-theoretical contexts.[11] Starting from initial conditions determined by the modeler, an ACE model develops forward through time driven solely by agent interactions; the scientific objective of the method is "to ... test theoretical findings against real-world data in ways that permit empirically supported theories to cumulate over time, with each research building on the work before."[12]

Computational solution tools include for example software for carrying out various matrix operations (e.g. matrix inversion) and for solving systems of linear and non-linear equations. For a repository of public-domain computational solutions, visit here.

The following journals specialise in computational economics: ACM Transactions on Economics and Computation,[13] Computational Economics,[1] Journal of Applied Econometrics,[14] Journal of Economic Dynamics and Control[15] and the Journal of Economic Interaction and Coordination.[16]

References[edit]

  1. ^ a b Computational Economics. ""About This Journal" and "Aims and Scope."
  2. ^ a b Scott E. Page, 2008. "agent-based models," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  3. ^ The New Palgrave Dictionary of Economics, 2008. 2nd Edition:
      • "computation of general equilibria" by Herbert E. Scarf. Abstract.
      • "computation of general equilibria (new developments)" by Felix Kubler. Abstract.
  4. ^ • Hans M. Amman, David A. Kendrick, and John Rust, ed., 1996. Handbook of Computational Economics, v. 1, ch. 1-6, preview links.
  5. ^ Ray C. Fair "Computational Methods for Macroeconometric Models," Hans M. Amman, David A. Kendrick, and John Rust, ed., 1996. Handbook of Computational Economics, v. 1, ch. , pp. 143-169. Outline.
  6. ^ • Vassilis A. Hajivassiliou, 2008. "computational methods in econometrics," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
       • Keisuke Hirano, 2008. "decision theory in econometrics," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
       • James O. Berger, 2008. "statistical decision theory," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  7. ^ • Hans M. Amman, David A. Kendrick, and John Rust, ed., 1996. Handbook of Computational Economics, v. 1, Elsevier. Description & chapter-preview links.
       • Kenneth L. Judd, 1998. Numerical Methods in Economics, MIT Press. Links to description and chapter previews.
  8. ^ • Scott E. Page, 2008. "agent-based models," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
       • Leigh Tesfatsion, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," ch. 16, Handbook of Computational Economics, v. 2, [pp. 831-880]. Abstract and pre-pub PDF.
       • Kenneth L. Judd, 2006. "Computationally Intensive Analyses in Economics," Handbook of Computational Economics, v. 2, ch. 17, pp. 881- 893. Pre-pub PDF.
       • L. Tesfatsion and K. Judd, ed., 2006. Handbook of Computational Economics, v. 2, Agent-Based Computational Economics, Elsevier. Description & and chapter-preview links.
       • Thomas J. Sargent, 1994. Bounded Rationality in Macroeconomics, Oxford. Description and chapter-preview 1st-page links.
  9. ^ W. Brian Arthur, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, 84(2), pp. 406-411.
       • Leigh Tesfatsion, 2003. "Agent-based Computational Economics: Modeling Economies as Complex Adaptive Systems," Information Sciences, 149(4), pp. 262-268 Archived April 26, 2012, at the Wayback Machine.
       • _____, 2002. "Agent-Based Computational Economics: Growing Economies from the Bottom Up," Artificial Life, 8(1), pp.55-82. Abstract and pre-pub PDF Archived 2013-05-14 at the Wayback Machine.
  10. ^ • W. Brian Arthur, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, 84(2), pp. 406-411.
       • John H. Holland and John H. Miller (1991). "Artificial Adaptive Agents in Economic Theory," American Economic Review, 81(2), pp. 365-370.
       • Thomas C. Schelling, 1978 [2006]. Micromotives and Macrobehavior, Norton. Description, preview.
       • Thomas J. Sargent, 1994. Bounded Rationality in Macroeconomics, Oxford. Description and chapter-preview 1st-page links.
  11. ^ Joseph Y. Halpern, 2008. "computer science and game theory," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
       • Yoav Shoham, 2008. "Computer Science and Game Theory," Communications of the ACM, 51(8), pp. 75-79.
       • Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, 70(4), pp. 1341–1378 Archived 2004-04-14 at the Wayback Machine.
  12. ^ Leigh Tesfatsion, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," ch. 16, Handbook of Computational Economics, v. 2, sect. 5, p. 865 [pp. 831-880]. Abstract and pre-pub PDF.
  13. ^ "ACM Teac".
  14. ^ "Journal of Applied Econometrics - Wiley Online Library". Onlinelibrary.wiley.com. 2011. doi:10.1002/(ISSN)1099-1255. hdl:2027.42/34956. Retrieved October 31, 2011.
  15. ^ Journal of Economic Dynamics and Control, including Aims & scope link.
     For a much-cited overview and issue, see:
      • Leigh Tesfatsion, 2001. "Introduction to the Special Issue on Agent-based Computational Economics," Journal of Economic Dynamics & Control, pp. 281-293.
      • [Special issue], 2001. Journal of Economic Dynamics and Control, Agent-based Computational Economics (ACE). 25(3-4), pp. 281-654. Abstract/outline links.
  16. ^ "Journal of Economic Interaction and Coordination". springer.com. 2011. Retrieved October 31, 2011.

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