This paper brings simulations of an agent-based model of liquidity flows among banks. The model presented here is built on some fundamental, well-established assumptions from the theory of banking and finance. A critical part of the paper introduces a set of base-level rules, aimed at providing...

In this review we discuss advances in the agent-based modeling of economic and social systems. We show the state of the art of the heuristic design of agents and how behavioral economics and laboratory experiments have improved the modeling of agent behavior. We further discuss how economic...

We propose a network-based structural model of credit risk to demonstrate how idiosyncratic and systemic shocks propagate across the banking system and evaluate the costs. The banking system is built as a network of heterogeneous banks which are connected with one another. In such a system,...

We study the stability of the banking system after a mortgage shock when a discretionary bailout policy is applied. Results suggest that the authority should be focused on preventing contagion. The decision over the appropriate policy depends upon the goal which the authority wants to pursue....