Title: Uncertainty in basic short-term macroeconomic models with angel-daemon games

Authors: Joaquim Gabarro; Maria Serna

Addresses: Computer Science Dept. ALBCOM Research Group, Universitat Politècnica de Catalunya (UPC) (BarcelonaTech), Barcelona, Spain ' Computer Science Dept. ALBCOM Research Group, Universitat Politècnica de Catalunya (UPC) (BarcelonaTech), Barcelona, Spain

Abstract: We propose the use of an angel-daemon framework to perform an uncertainty analysis of short-term macroeconomic models. The angel-daemon framework defines a strategic game where two agents, the angel and the daemon, act selfishly. These games are defined over an uncertainty profile which presents a short and macroscopic description of a perturbed situation. The Nash equilibria on these games provide stable strategies in perturbed situations, giving a natural estimation of uncertainty. We apply the framework to the uncertainty analysis of linear versions of the IS-LM and the IS-MP models.

Keywords: uncertainty profiles; zero-sum games; angel-daemon games; strategic games; IS-LM model; IS-MP model.

DOI: 10.1504/IJDATS.2017.088359

International Journal of Data Analysis Techniques and Strategies, 2017 Vol.9 No.4, pp.314 - 330

Received: 02 Dec 2015
Accepted: 07 Sep 2016

Published online: 30 Nov 2017 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article