Doyne Farmer - Macroeconomics From the Bottom Up

The video discusses a project led by a Santa Fe Institute professor, funded by the INET grant, aiming to create an agent-based model of the economy. The model simulates individual decisions to predict economic outcomes, focusing initially on the housing market. The project critiques existing econometric and DSG models for their limitations and emphasizes the need for detailed data and collaboration. The speaker, a physicist, shares his journey from modeling financial markets to addressing macroeconomic challenges, motivated by the financial crisis.

What is the significance of having heterogeneous agents in the model?

What are the limitations of the DSGE models mentioned in the text?

In what ways did the author's background in physics influence their approach to economic modeling?

How does the author describe the relationship between the financial crisis and the development of the new economic model?