Macroeconomic policy design plays a fundamental role in social welfare and requires a coordinated application of economic policy measures, e.g., fiscal and monetary strategies, knowledge exchange, R&D incentives etc. Generally speaking, the interplay of such different measures is not completely understood. Different types of mainstream macroeconomic models typically restrict attention to specific policy areas and rely on highly abstract description of the economic environment and agents' decision processes. Agent-based macroeconomic models have the potential to provide a unified micro-founded framework for the analysis of measures in different policy areas. They allow to represent institutional details governing economic interactions and decision making as well as the differences in these details across regions. In Agent-based models heterogeneities with respect to the charactersitics of economic agents and also the heterogeneity of the distributions of charactersitics across regions can be adequately captured. Different time frames (short/medium/long-run) for policy effects can be distinguished  and the spatial structure of economies can be taken into account in a more thorough way than in alternative approaches to macroeconomic modelling. Accordingly, agent-based models have high potential to provide policy-makers with rich and empirically grounded models for the evaluation of economic policy measures.

Between 2006 - 2009 the EURACE project (a EU funded FET Proactive Initiative) tackled the complex problem of micro-founded macroeconomic modelling using an agent-based computational economics approach. The project objectives were characterized by scientific, technological and societal scopes.

• From the scientific point of view, the main effort regarded the study and the development of multi-agent models that reproduce, at the aggregate economic level, the emergence of global features as a self organized process from the complex pattern of interactions among heterogeneous individuals.

• From the technological point of view, the project developed, with advanced software engineering techniques, a software platform in order to realize a powerful environment for large-scale agent-based economic simulations.
  

• Finally, from the social point of view, the project aimed to have an outstanding impact on the economic policy design capabilities of the European Union 

EURACE was funded by the European Commission under FP6, the Bielefeld research unit has also received financial support from the Ministry of Innovation, Science, Research and Technology in Northrhine/Westfalia (http://www.innovation.nrw.de/).

The EURACE project was completed in November 2009 and produced an integrated Agent-based simulation platform and numerous research publications. The EURACE model (and its extensions) is generally regarded as the most complete and advanced agent-based macroeconomic model currently available. This page focusses on the contribution of the Bielefeld unit to the project.

• A list of deliverables completed during the Project is here.
• A list of (some) papers based on the Eurace Project is here.

Links to other sites of Eurace partners:

• Description of EURACE at Sheffield University
• Description of EURACE at CCLRC
• FLAME website at epiGenesys
• Description of FLAME on CCPForge

• Press Releases from the European Commission upon the completion of the EURACE project in November 2009, Download

• The 'New Scientist' in its issue from October 30, 2010 praises EURACE as 'the largest agent-based model of the economy developed so far', Title "The Earth Simulator"

•  Articel (in german) from the February 2009 issue of Technology Review featuring the EURACE project, Title: "Europa reloaded"

Following the completion of the official EURACE project in November 2009 the Bielefeld unit has been active (together with some former EURACE partners) in extending and improving the EURACE model with respect to model design, parameter calibration and tools of analysis. In particular, several aspects of the goods and labor market as well as the firms' behavioral rules have been redesigned and extended, extensive calibration and robustness checks have been carried out and systematic comparisons of simulation results to large sets of empirical stylized facts have been made and innovative statistical methods (penalized spline methods) for the analysis of dynamic effects of policy measures have been adjusted to the setting of the model and applied. Details about the current status of this model, the 'Eurace@Unibi' model can be found here.