Large-Scale Modeling of Economic Systems

Abstract

Following the events of the credit crunch and the onset of a global reces- sion, alternative ways of modeling modern economies and mechanisms for carrying out policy analysis are now an urgent priority. Traditional mathematical economics is widely viewed to have been compromised through gross simplifications with many assumptions that are now seen to be unjustified. New ways of looking at economics that are more grounded in reality are required, and agent-based computational eco- nomics is now receiving a lot of attention. Although the ideas are not new, the previous attempts to use this approach have been largely lim- ited by the inability to model realistically large systems with millions of complex agents. Without this capability, the usefulness of the approach is limited. The EU–STREP project EURACE brought together a consor- tium of leading economists, experts in parallel supercomputing, and the designers of the FLAME framework to build the largest and most com- plete model of the European Union economy ever built.