Journal on Policy and Complex Systems
2 . The only factor required to reproduce the positive effect of income tax reduction is inefficient government expenditure . Factors required to reproduce the positive effect of corporate tax reduction include inefficient government expenditure , executive compensation , the use of internal funds for investment , and the mitigation of credit rationing .
3 . Based on these findings , this study proposed causal mechanisms of business cycles and the positive effect of tax reduction . Business cycles emerge because overborrowing from the bank promotes an economy that is followed by excessive repayment due to credit rationing that worsens the economy . Positive effect of tax reduction emerges when substantial marginal propensity to consume at private sector is larger than that at public sector .
4 . This study proposed new perspectives on the validity of ABM based on these findings , the essence of which is the following . In case of 100 % bottom-up model in ABM , necessary conditions for qualitatively reproducing each of the macro phenomena can be identified if the input conditions of the model are expressed by the model structure defined by the set of the categories of agents , their behavioral rules , and relevant attributes variables . We can elucidate the necessary factors in the model structure by running a series of systematic computer experiments in which elements are changed one by one at a time with other factors kept constant . By considering the reason why such factors are required to reproduce the phenomenon , it is possible to gain a better understanding of the causal mechanism of the phenomenon .
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