Monte Carlo simulation of macroeconomic risk with a continuum of agents: the symmetric case

B-Tier
Journal: Economic Theory
Year: 2003
Volume: 21
Issue: 2
Pages: 743-766

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Suppose a large economy with individual risk is modeled by a continuum of pairwise exchangeable random variables (i.i.d., in particular). Then the relevant stochastic process is jointly measurable only in degenerate cases. Yet in Monte Carlo simulation, the average of a large finite draw of the random variables converges almost surely. Several necessary and sufficient conditions for such “Monte Carlo convergence” are given. Also, conditioned on the associated Monte Carlo -algebra, which represents macroeconomic risk, individual agents' random shocks are independent. Furthermore, a converse to one version of the classical law of large numbers is proved. Copyright Springer-Verlag Berlin Heidelberg 2003

Technical Details

RePEc Handle
repec:spr:joecth:v:21:y:2003:i:2:p:743-766
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25