Aggregate Shock

Aggregate shocks, sudden changes impacting an entire economic system, are a central focus in current macroeconomic research, aiming to understand their propagation and effects on diverse agents. Researchers employ sophisticated computational methods, including deep learning algorithms and novel solution techniques for high-dimensional heterogeneous agent models, to simulate and analyze these shocks across various economic settings, from individual markets to entire platforms. This work is crucial for improving the accuracy and predictive power of macroeconomic models, informing policy decisions related to regulation, taxation, and economic resilience in the face of unexpected events.