Ace Models

Types of Macroeconomic Models - Agent-based Computational Macroeconomic Models - Strengths and Weaknesses of DSGE and ACE Models
... DSGE and ACE models have different advantages and disadvantages due to their different underlying structures ... DSGE models may exaggerate individual rationality and foresight, and understate the importance of heterogeneity, since the rational expectations ... Also, unlike ACE models, it may be difficult to study local interactions between individual agents in DSGE models, which instead focus mostly on the way agents interact through aggregate prices ...