Micro-Foundations of Macroeconomic Dynamics: The Agent-Based BAM Model

This paper presents an open-source agent-based implementation of the BAM model, a micro-founded simulation of macroeconomic basic dynamics defined in the reference book Macroeconomics from the Bottom-up. By exploring the parameter space of our simulation we show that: i) BAM reproduces numerous stylized facts and its parameters influence the outputs plausibly; and ii) the effects of changing the size of markets and introducing shocks of different sizes are as expected. The outcomes are measured in terms of gross domestic product, inflation and unemployment rate, using monthly payments as time scale. These results confirm the fidelity and usability of our implementation, as well as the feasibility of the BAM model.