Tae-Sub Yun, Hanbit Lee, and Il-Chul Moon, Finance and Decreasing Business Dynamics: Using Macroeconomic Agent-Based Simulation, Social Simulation Conference (SSC 2022), Milan, Italy, Sep 14, 2022

Abstract

This paper analyzes the impact of finance on business dynamism using an agent-based simulation. We extend the Keynes meeting Schumpeter model and validate the model on South Korea’s economy. We use Debt-to-Sales ratio and interest rate as measures of quantity and cost of corporate finance services respectively, and economic growth rate, market concentration, and labor share as indicators for business dynamism. Simulation results show that improvement in quantity and cost of finance have positive linear effect on economic growth rate, whereas for market concentration and labor share the effects are non-linear. Additionally, we observe a negative correlation between market concentration and labor share. We investigate the underlying reasons for the aggregated results through firm-level analysis.  

@inproceedings{inproceedings,

author = {Yun, Tae-Sub and Lee, Hanbit and Moon, Il Chul},

year = {2022},

title = {Finance and Decreasing Business Dynamics: Using Macroeconomic Agent-Based Simulation}

}