Skip to main content Accesibility Help


  • Pascal Seppecher (a1)

We present a model of a dynamic and complex economy in which the creation and the destruction of money result from interactions between multiple and heterogeneous agents. In the baseline scenario, we observe the stabilization of the income distribution between wages and profits. We then alter the model by increasing the flexibility of wages. This change leads to the formation of a deflationary spiral. Aggregate activity decreases and unemployment increases. The macroeconomic stability of the model is affected and eventually a systemic crisis arises. Finally, we show that the introduction of a minimum wage would have made it possible to boost the aggregate demand and to avoid this crisis.

Corresponding author
Address correspondence to: Pascal Seppecher, GREDEG, 250 rue Albert Einstein–Bâtiment 2, 06560 Valbonne, France; e-mail:
Hide All
Arthur, W. Brian (2006) Out-of equilibrium economics and agent-based modeling. In Tesfatsion, Leigh and Judd, Kenneth L. (ed.), Handbook of Computational Economics, vol. 2, pp. 16251637. Amsterdam: Elsevier/North-Holland.
Bruun, C. (1999) Agent-Based Keynesian Economics: Simulating a Monetary Production System Bottom-Up. Working paper, Department of Economics, Politics and Public Administration, Aalborg University.
Cincotti, Silvano, Raberto, Marco, and Teglio, Andrea (2010) Credit money and macroeconomic instability in the agent-based model and simulator Eurace. Economics: The Open-Access, Open-Assessment E-Journal 4 (26).
Cyert, Richard M. and March, James G. (1963) A Behavioral Theory of The Firm. Englewood Cliffs, NJ: Prentice-Hall.
Delli Gatti, Domenico, Gaffeo, Edoardo, and Gallegati, Mauro (2010) Complex agent-based macroeconomics: A manifesto for a new paradigm. Journal of Economic Interaction and Coordination 5 (2), 115135.
Farmer, J. Doyne and Foley, Duncan (2009) The economy needs agent-based modelling. Nature, 460(August 6), 685686.
Godley, Wynne and Lavoie, Marc (2007) Monetary Economics, An Integrated Approach to Credit, Money, Income, Production and Wealth. Basingstoke, UK: Palgrave Macmillan.
Howitt, Peter (2008) Macroeconomics with intelligent autonomous agents. In Farmer, Roger E. A. (ed.), Macroeconomics in the Small and the Large: Essays on Microfoundations, Macroeconomic Applications and Economic History in Honor of Axel Leijonhufvud. Northampton, MA: Edward Elgar.
Keynes, John Maynard (1936) The General Theory of Employment, Interest and Money. New York: Macmillan, St. Martin's Press.
Keynes, John Maynard (1939) Relative movements of real wages and output. Economic Journal 49 (193).
Lavoie, Marc (1984) The endogenous flow of credit and the post Keynesian theory of money. Journal of Economic Issues 18 (3), 771797.
Leijonhufvud, Axel (2006) Agent-based macro. In Tesfatsion, Leigh and Judd, Kenneth L. (ed.), Handbook of Computational Economics, vol. 2, pp. 16251637. Amsterdam: Elsevier/North-Holland.
Moore, Basil J. (1979) The endogenous money stock. Journal of Post Keynesian Economics 2 (1), 4970.
Seppecher, Pascal (2010) Dysfonctionnement bancaire, bulle du crédit et instabilité macroéconomique dans une économie monétaire dynamique et complexe. Revue Economique 61 (3), 441449.
Simon, Herbert Alexander (1962) The architecture of complexity. Proceedings of the American Philosophical Society 106 (6), 467482.
Simon, Herbert Alexander (1996) The Science of the Artificial. Cambridge, MA: MIT Press.
Tesfatsion, Leigh (2006) Agent-based computational economics: A constructive approach to economic theory. In Tesfatsion, Leigh and Judd, Kenneth L. (eds.), Handbook of Computational Economics, vol. 2, pp. 16251637. Amsterdam: Elsevier/North-Holland.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Macroeconomic Dynamics
  • ISSN: 1365-1005
  • EISSN: 1469-8056
  • URL: /core/journals/macroeconomic-dynamics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *



Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed