Chapter

Economic Models

John Kay

in The Business of Economics

Published in print October 1996 | ISBN: 9780198292227
Published online November 2003 | e-ISBN: 9780191596520 | DOI: http://dx.doi.org/10.1093/0198292228.003.0003
 Economic Models

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Building bigger and more elaborate models will neither help us arrive at more realistic descriptions of the world nor help make our predictions more accurate. Mathematical models are just a more accurate way of describing certain complex systems and even though such a model can enhance our understanding of the problem and help us check the internal consistency of our assumptions, it will not tell us something we have not already told it.

Keywords: assumptions; complex systems; consistency; economic forecasts; growth; inflation; interest rates; macroeconomic models; wise men

Chapter.  2527 words.  Illustrated.

Subjects: Microeconomics

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