AILEEN LOTZ

Abstract: This paper provides a general method to directly translate a classical economic framework with a large number of agents into a field-formalism model. This type of formalism allows the analytical treatment of economic models with an arbitrary number of agents, while preserving the system's interactions and microeconomic features of the individual level... We apply this methodology to model the interactions between financial markets and the real economy, described in a classical framework of a large number of heterogeneous agents, investors and firms. Firms are spread among sectors but may shift between sectors to improve their returns. They compete by producing differentiated goods and reward their investors by paying dividends and through their stocks' valuation. Investors invest in firms and move along sectors based on firms' expected long-run returns... The field-formalism model derived from this framework allows for collective states to emerge. We show that the number of..