Monday, February 02, 2015

Engineering models and economic models

As I am finishing up my review of Mary Morgan's book, as well as reflecting back on several months of fairly intensive agent-based modeling, I find myself thinking that the use of models in the social sciences is much like its use in engineering: the model allows us to answer questions such as, "If the assumptions that went into building the model are true, then what will happen if we introduce this change?" In either field, the assumptions are always only more-or-less true, and may be wildly off: the engineer, for instance, may be mistaken about how strong the effect of the wind will be on a bridge he is building:

To understand the analogy I am making, consider that the above can also be taken as a visual representation of what happened to Murphy's macroeconomic model following 2007. (We kid because we love, Bob!)

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