Mr.Keynes and the... Complexity! A suggested agent-based version of the General Theory of Employment, Interest and Money

Abstract

This paper presents a model with the aim to follow, as closely as possible, the rationale of the macroeconomic model advanced by J.M. Keynes in his famous "The General Theory of Employment, Interest and Money", in order to provide a viable tool for macroeconomic research. Keynes' main result will be shown, i.e., to determine the level of income and employment starting from the marginal efficiency of capital and the marginal propensity to consume, given the interest rate. Elements of the model will be described by referring to the original text. The sequentiality in model operation will prove quintessential in order to describe the complex nature of macroeconomic systems.