An agent-based "proof of principle" for Walrasian macroeconomic theory

Macroeconomic models are typically solved through the imposition of a top-down general equilibrium solution constraining agents’rational behavior. This is customarily obtained by recurring, explicitly or not, to the Walrasian auctioneer (WA) arti…ce. In this paper we aim at contributing to the small but burgeoning literature that deals with the consequences of removing it from the start by means of agent-based techniques. We let the textbook full-employment neoclassical macroeconomic model be populated by a large number of bounded-rational, autonomous agents, who are repeatedly engaged in decentralized transactions in interrelated markets. We set up a computational laboratory to perform several experiments, whose designs di¤er as regards the way we treat learning on the one side, and the institutional arrangement determining who between …rms and workers is bound to bear the risk associated to incomplete markets on the other one. We show that our fully decentralized multimarket system admits the possibility to attain the WA full-employment solution, but also that serious coordination failures emerge endogenously as learning mechanisms and institutional settings are varied. Keywords : Agent-based computational economics; Decentralized exchange process; Microfoundations of macroeconomics JEL Classi…cation : B40; D51; E17 We are indebted to Andrea Fracasso, Roberto Tamborini, Stefano Zambelli, and seminar participants at the University of Trento and the CEF Annual Meeting in Montreal for helpful comments on earlier drafts. The usual caveat applies.