ECONOMIC SIMULATIONS AND ECONOMIC
DEVELOPMENT
BY
GYULA RÁBAI
PLAN
•Intro
•Computational Economics
•Applied Example (DES with Solow-Swan)
•Other Techniques:
•Continous Simulation
•Monte Carlo
•DSGE
•Agentic Simulations
•AI?
THE NATURE OF ECONOMICS
ModelInputs Outputs
Labour Solow-Swan Total Production
BIG DATA
“The organisational structure is currently being reviewed to respond to
an increased focus on Data Science, Big Data and the growing
importance of digital technologies”
- ONS
USES FOR COMPUTATIONAL ECONOMICS
•Test Hypotheses
•Find Patterns
COMPUTATIONAL ECONOMICS
Solow-Swan ?
COMPUTATIONAL ECONOMICS
?
Computer
Solow-Swan
COMPUTATIONAL ECONOMICS
Computer
Solow-Swan
COMPUTATIONAL ECONOMICS
Computer
Solow-Swan
COMPUTATIONAL ECONOMICS
Solow-Swan
Evaluation of Accuracy
Economic Implications
DISCRETE EVENT SIMULATION
•Break time down into small units called time
steps or ticks
•Apply the equations to the data for each time
step
•Record the data obtained at each time step
and put it on a graph
DISCRETE EVENT SIMULATION
•Data Sets:
•‘Employment rate (aged 16 to 64, seasonally adjusted): %’, .csv format, ONS
•‘LFS: Population aged 16-64: All: Thousands’, .csv format, ONS
•‘Gross Domestic Product at market prices: Current price: Seasonally adjusted £m’, .csv
format, ONS
DISCRETE EVENT SIMULATION
Load Employment Rate
Load Labour Force
Get Total Number Employed
Computer
DISCRETE EVENT SIMULATION
Computer
Solow-Swan
Constants
Formulae in Python
Caclulate Output
DISCRETE EVENT SIMULATION
Computer
DISCRETE EVENT SIMULATION
CONTINOUS SIMULATION
MONTE CARLO
MONTE CARLO: VALUE AT RISK
DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM
AGENTIC SIMULATIONS
AGENTIC SIMULATIONS
EXAMPLE: WEALTH DISTRIBUTION
AI
