Recent years have seen major advances in the ability of computational tools to explain the economic behavior of households, firms, and whole economies. But a major impediment to the widespread adoption of these techniques among economists has been the extent to which the advances are the culmination of years of development of intricate and hand-crafted (but mutually incomprehensible) computational tools by a few pioneering scholars and their students. The aim of the Econ-ARK project is to make it much easier for new scholars to begin using these techniques, by providing a modern, robust, open-source set of high-quality computational tools with components that can be mixed, matched, and extended to address the wide variety of problems across all fields of economics that can be effectively studied using such tools.
Most of what economists have done so far with 'big data' has been like what Kepler did with astronomical data: Organizing the data, and finding patterns and regularities and interconnections. An alternative approach called 'structural modeling' aims to do, for economic data, what Newton did for astronomical data: Provide a deep and rigorous mathematical (or computational) framework that distills the essence of the underlying behavior that produces the 'big data.' But structural techniques are so novel and computationally difficult that few economists have mastered them. The aim of the Econ-ARK project is to make it much, much easier for new scholars to do structural modeling, by providing a well-documented, open source codebase that contains the core techniques and can be relatively easily adapted to address many different questions.
The Econ-ARK project is motivated by a sense that quantitative structural modeling of economic agents' behavior (consumers; firms), at present, is roughly like econometric modeling in the 1960s: Lots of theoretical results are available and a great deal can be done in principle, but actually using such tools for any specific research question requires an enormous investment of a scholar's time and attention to learn techniques that are fundamentally not related to economics but instead are algorithmic/computational (in the 1960s, e.g., inverting matrices; now, e.g., solving dynamic stochastic optimization problems). The toolkit is built using the suite of open source, transparent tools for collaborative software development that have become ubiquitous in other fields in the last few years: Github, object-oriented coding, and methods that make it much easier to produce plug-and-play software modules that can be (relatively) easily combined, enhanced and adapted to address new problems.
Dissatisfaction with the ability of Representative Agent models to answer important questions raised by the Great Recession has led to a strong movement in the macroeconomics literature toward 'Heterogeneous Agent' models, in which microeconomic agents (consumers; firms) solve a structural problem calibrated to match microeconomic data; aggregate outcomes are derived by explicitly simulating the equilibrium behavior of populations solving such models. The same kinds of modeling techniques are also gaining popularity among microeconomists, in areas ranging from labor economics to industrial organization. In both macroeconomics and structural micro, the chief barrier to the wide adoption of these techniques has been that programming a structural model has, until now, required a great deal of specialized knowledge and custom software development. The aim of the Econ-ARK project is to provide a robust, well-designed, open-source infrastructure for building such models much more efficiently than has been possible in the past.
Getting HARK up and running on your computer is very easy. First, go to continuum.io and install the Anaconda distribution of Python (version 3). Second, go to econ-ark.org, click on HARK, then download a zip of the toolkit by clicking the bright green download button; unzip the code wherever you'd like. Third, open the Spyder IDE by typing spyder at a command prompt (or, for Windows 10, open it using the Windows program list). You can then open any HARK module (.py files) and run it using the green arrow "run" button. We recommend the demonstration applications in /ConsumptionSaving/Demos/, which include step-by-step descriptions for representing agents to answer some relatively simple questions. For more detailed information on how HARK works, see the user guide at /Documentation/HARKmanual.pdf.
The Econ-ARK project's aim is to create a modular and extensible open-source toolkit for solving heterogeneous-agent partial-and general-equilibrium structural models. The code for such models has always been handcrafted, idiosyncratic, poorly documented, and sometimes not generously shared from leading researchers to outsiders. The result that it can take years for a new researcher to become proficient. Building an integrated system from the bottom up using object-oriented programming techniques and other tools (GitHub, open source licensing, unit testing, etc), we aim to provide a platform that will become a focal point for people using such models. At present, the project contains: A set of general purpose tools for solving such models; a number of tutorials and examples of how to use the tools; and complete archives of several papers whose main contribution is structural modeling results, and whose modeling work has been done using the toolkit.