Jennifer Jhun (Lake Forest College)
We explore the explanatory upshot of supplementing traditional economics with econophysics models by investigating more contemporary models that are popular among economists. Two popular contemporary approaches to modeling in macroeconomics are: dynamic stochastic general equilibrium (DSGE) methods and computational agent-based modeling (ABM) methods – the latter which include econophysics models. We argue that they are explanatorily different, but that a pluralist attitude can help us unite the two kinds of approaches, i.e. equilibrium reasoning can be fruitfully united with reasoning about critical behavior that lends itself to phenomena like financial crises.
