New Approaches to Macroeconomic Modeling
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This book contributes substantively to the current state of the art of macroeconomic modeling by providing a method for modeling large collections of heterogeneous agents subject to nonpairwise externality called field effects i.e. feedback of aggregate effects on individual agents or agents using state-dependent strategies. Adopting a level of microeconomic description that keeps track of compositions of fractions of agents by types or strategies time evolution of the microeconomic states is described by (backward) Chapman-Kolmogorov equations.
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