Work

Accounting State Space as the Minimal Unit for Economic Agent-Based Modeling: Advancing Ripple Effect Analysis in Real-Time Economy

Year: 2026

Type: preprint

Abstract: The emergence of Real-Time Economy has highlighted the critical importance of accounting data as the fundamental unit of economic activity. In economic Agent-Based Modeling (ABM), accounting state space represents the minimal unit for capturing economic transactions and their ripple effects. This paper develops an Accounting-State Agent-Based Simulation (AS-ABM) that embeds inventory levels and input constraints into an IO-consistent production network, where agents maintain bookkeeping state spaces and interact in stage-oriented time. We demonstrate that accounting state space serves as the essential foundation for realistic economic modeling, enabling the analysis of dynamic ripple effects with stock-out behavior and replenishment lags. Through three simulations—(i) the Leontief inverse benchmark, (ii) an ABM reproducing the benchmark, and (iii) an ABM with input constraints—we show that stock-out policies govern amplification versus damping of ripple effects. The model reproduces key stylized facts on variability and generates Kitchin-type inventory cycles via endogenous delays, providing a mechanism-based explanation for gaps between IO predictions and observed outcomes in Real-Time Economy contexts.

Source: Research Square

DOI: 10.21203/rs.3.rs-8485050/v1

Author: Kaya Akagi

Institution: Chiba University of Commerce

Language: English

Topic: Complex Systems and Time Series Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: Japan Society for the Promotion of Science

Award: Development of Real-Time Economy Statistical Services Using XML Invoice Data