2025/17 | LEM Working Paper Series | ||||||||||||||||
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From ABM back to real data: time series visualization and model selection in the K+S agent-based model |
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Giovanni Dosi, Marcelo C. Pereira, Gabriel Petrini, Andrea Roventini and Maria Enrica Virgillito |
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Keywords | |||||||||||||||||
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Agent-Based Models, Model selection, Validation, Similarity measurement
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JEL Classifications | |||||||||||||||||
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C63, C52, C18
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Abstract | |||||||||||||||||
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Agent-Based Models (ABMs) provide powerful tools for economic
analysis, capturing microto- macro interactions and emergent
properties. However, integration with empirical data has been a
persistent challenge. To address it, we propose a protocol for
integration between empirical data and ABM, building a new
multidimensional similarity index that aggregates different similarity
measures into a composite score, specifically designed to quantify
alignment between simulated and real-world data. This metric enables a
complete model ranking procedure, facilitating a streamlined model selection. The protocol is designed to be model-agnostic and flexible, allowing its application to a wide range of models beyond ABMs,
including aggregate dynamical systems and any type of computational model. As an example, we apply our methodology to different configurations and model versions of the Schumpeter meeting Keynes
(K+S) ABM family (Dosi, Fagiolo, and Roventini, 2010) using US data
(from 1948Q1 to 2019Q1). Next, we propose a policy-informed
application, attributing different weights to variables associated
with policy-making decisions and technological change. The exercise is
done in order to showcase the capacity of the procedure to target
specific policy variables of interest, allowing for the design of
empirically informed scenario analyses and projections on real-world
dynamics.
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