Professor Duncan Foley, the Leo Model Professor of Economics at The New School for Social Research, and his co-author J. Doyne Farmer from Santa Fe Institute, published an opinion article in the international weekly journal Nature entitled, “The Economy Needs Agent Based Modelling.”

The article presents the need for agent-based models, especially during this time of unprecedented fiscal uncertainty. An agent-based model is a computerized simulation of a number of decision-makers (agents) and institutions, which interact through prescribed rules. The agents can be as diverse as needed — from consumers to policy-makers and Wall Street professionals — and the institutional structure can include everything from banks to the government. These models allow each agent to act according to its current situation, the state of the world around it and the rules governing its behaviour.

The authors’ argue that the time and complexities of modeling the economy would be arduous, but it would provide policy makers with “an unprecedented understanding of the emergent properties of interacting parts in complex circumstances.”