AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Heterogeneous Agent Models
AEA Papers and Proceedings
(pp. 168–71)
Abstract
Heterogeneous agent models have become central to modern macroeconomic research, often replacing the representative agent framework. However, what is core for these frameworks is the use of microfoundations that involve optimizing behavior. The strength of heterogeneous agent models lies in their ability to address questions where heterogeneity is essential—for instance, examining renters versus homeowners, the old versus the young, or the rich versus the poor. While advances in computational power have allowed these models to replicate observed wealth and income distributions effectively, much remains to be understood about the bottom of the income and wealth distributions.Citation
İmrohoroğlu, Ayşe. 2025. "Heterogeneous Agent Models." AEA Papers and Proceedings 115: 168–71. DOI: 10.1257/pandp.20251117Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- E10 General Aggregative Models: General
- E21 Macroeconomics: Consumption; Saving; Wealth
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination