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We build an agent-based model to study how the interplay between low- and high- frequency trading affects asset price dynamics. Our main goal is to investigate whether high-frequency trading exacerbates market volatility and generates flash crashes. In the model, low-frequency agents adopt...
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We analyze the individual and macroeconomic impacts of heterogeneous expectations and action rules within an agent …, we find that neither individual nor macroeconomic dynamics improve when agents replace myopic expectations with less … naïve learning rules. In fact, more sophisticated, e.g. recursive least squares (RLS) expectations produce less accurate …
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Wages are an element of cost crucially aecting the competitiveness of individual firms. But the wage bill is also a crucial element of aggregate demand. Hence it could be that more "flexible" and fluid labour markets, while allowing for faster inter-firm reallocation of labour, may also render...
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