←back to thread

Simulated Economy Tutorial

(jasonfantl.com)
105 points jfantl | 4 comments | 02 Apr 25 00:05 UTC | HN request time: 0.212s | source
Show context
dlojudice ◴[02 Apr 25 01:42 UTC] No.43552972[source]▶
Agent-based modeling offers a more realistic approach to economic systems than traditional equilibrium models. New approachs including generative agents (ABM+LLMs) are promising. J. Doyne Farmer's recent book "Making Sense of Chaos: A Better Economics for a Better World" is a great reading for those interested in this field.

https://www.amazon.com/Making-Sense-Chaos-author/dp/02412019...

replies(4): >>43552985 #>>43553022 #>>43553102 #>>43553188 #
1. jgord ◴[02 Apr 25 01:55 UTC] No.43553022[source]▶
stands to reason .. if we assume the actual economy is full of autonomous agents [ people, companies, governments ] acting largely in self interest.
replies(1): >>43553054 #
2. jgord ◴[02 Apr 25 02:03 UTC] No.43553054[source]▶
Demis Hassabis seems to describe a process whereby an AI can accelerate the results of billions of simulations by efficiently encoding that predictive behavior.. making something that is computationally expensive to simulate perhaps several orders of magnitude more tractable.

This has proven out in the acceleration of actual weather prediction using AI which means it can be feasibly run on a single desktop machine.

I think its not a stretch to imagine that a) there is a way to simulate the whole economy at the same level of quality as a weather or climate simulation b) AI can accelerate the computations to the point they can run on accessible hardware.

We need this whole economy simulation ... to answer practical questions such as - if we dole out UBI to everyone to cover basic living costs, will that simply result in the cost of rent going up to absorb the whole amount ?

replies(2): >>43553374 #>>43553460 #
3. LeonB ◴[02 Apr 25 03:27 UTC] No.43553374[source]▶
> if we dole out UBI to everyone to cover basic living costs, will that simply result in the cost of rent going up to absorb the whole amount?

For that to be true, rent-seeking would have to literally capture all surplus. In which case UBI wouldn’t be an option in the first place.

The marginal increase in the purchasing power of someone who went from having $0 to $n would always be greater than the increase in purchasing power for someone who went from $1 billion to $1 billion + n - even with inflation.

4. tbrownaw ◴[02 Apr 25 03:42 UTC] No.43553460[source]▶
> We need this whole economy simulation ... to answer practical questions such as - if we dole out UBI to everyone to cover basic living costs, will that

"How will humans (in aggregate) behave under novel conditions?"

Models tend to behave poorly when asked about things outside their training distribution.