Agent-based modeling and the sociology of money: some suggestions for refining monetary theory using social simulation

TL;DR

This paper reviews how agent-based social simulation can refine monetary theory by integrating sociological insights with formal models, highlighting new research directions.

Contribution

It proposes combining sociological and agent-based modeling approaches to deepen understanding of money's roles in the economy.

Findings

Limited agent-based models of money emergence exist.

Social simulation offers potential for new insights into monetary phenomena.

Future research can integrate social and formal methods for monetary theory.

Abstract

The institution of money can be seen as a foundational social mechanism, enabling communities to quantify collectively regulate economic processes. Money can be said, indeed, to constitute the micro-macro link in economics. This paper reviews influential views on the nature of money in economics and sociology, contrasting them to the relatively limited findings of recent agent-based models of "the emergence of money". Noting ample room for novel combinations of sociological and formal methods to drive insight into the many roles played by money in the economy, we conclude by indicating research directions in which we believe this combination can provide new answers to old questions in monetary theory