Template-Type: ReDIF-Paper 1.0
Title: Agent-based modeling at central banks: recent developments and new challenges
Abstract: Over the past decade, agent-based models (ABMs) have been increasingly employed as analytical tools within economic policy institutions. This chapter documents this trend by surveying the ABM-relevant research and policy outputs of central banks and other related economic policy institutions. We classify these studies and reports into three main categories: (i) applied research connected to the mandates of central banks, (ii) technical and methodological research supporting the advancement of ABMs; and (iii) examples of the integration of ABMs into policy work. Our findings indicate that ABMs have emerged as effective complementary tools for central banks in carrying out their responsibilities, especially after the extension of their mandates following the global financial crisis of 2007-2009. While acknowledging that room for improvement remains, we argue that integrating ABMs into the analytical frameworks of central banks can support more effective policy responses to both existing and emerging economic challenges, including financial innovation and climate change.
Author-Name: Borsos, András
Author-Name: Carro, Adrian
Author-Name: Glielmo, Aldo
Author-Workplace-Name: Bank of Italy
Author-Name: Hinterschweiger, Marc
Author-Name: Kaszowska-Mojsa, Jagoda
Author-Email: jagoda.kaszowska-mojsa@maths.ox.ac.uk
Author-Workplace-Name: Institute for New Economic Thinking, University of Oxford
Author-Name: Uluc, Arzu
File-URL: https://oms-inet.files.svdcdn.com/production/files/Agent_based_modeling_at_central_banks_WP_Feb_2025.pdf?dm=1741021620
File-Format: Application/pdf
File-Function: 
Keywords: Agent-based models, household analysis, financial institutions, central bank policies, monetary policy, prudential policies
Length: 24 pages
Classification-Jel: C63, E37, E58
Creation-Date: 2025-02
Handle: RePEc:amz:wpaper:2025-05