Parkes, David CBrero, GianlucaBi, Kevin2021-07-1920212021-06-172021Bi, Kevin. 2021. Agent-Based Modeling for Optimal Economic Policy with Exogenous Shocks. Bachelor's thesis, Harvard College.28410893https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37368569My thesis explores the application of reinforcement learning and agent-based computational economics to the problem of optimal policy in an environment with exogenous shocks. I develop an agent-based general equilibrium economic model that is considerably simpler and more extensible than existing agent-based models. For this model, I introduce a price adjustment process and prove that under suitable assumptions, the process converges in a single market with variable supply and demand, as well as in an exchange economy. I then present simulation results where agents in economy learn via deep reinforcement learning methods, and show that agents learn to behave in accordance with theoretical predictions. Finally, I introduce exogenous unemployment shocks to the economy, and show that a social planner trained with reinforcement learning is able to improve welfare for the workers in the economy.application/pdfenAgent-BasedExogenous shocksRecessionReinforcement LearningStimulusEconomicsComputer scienceThesis or Dissertation2021-07-19