Model Building in Economics: Its Purposes and Limitations

Model Building in Economics: Its Purposes and Limitations

by Lawrence A. Boland


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Model Building in Economics: Its Purposes and Limitations by Lawrence A. Boland

Concern about the role and the limits of modeling has heightened after repeated questions were raised regarding the dependability and suitability of the models that were used in the run-up to the 2008 financial crash. In this book, Lawrence Boland provides an overview of the practices of and the problems faced by model builders to explain the nature of models, the modeling process, and the possibility for and nature of their testing. In a reflective manner, the author raises serious questions about the assumptions and judgments that model builders make in constructing models. In making his case, he examines the traditional microeconomics-macroeconomics separation with regard to how theoretical models are built and used and how they interact, paying particular attention to the use of equilibrium concepts in macroeconomic models and game theory and to the challenges involved in building empirical models, testing models, and using models to test theoretical explanations.

Product Details

ISBN-13: 9781107673472
Publisher: Cambridge University Press
Publication date: 09/15/2014
Pages: 200
Product dimensions: 5.98(w) x 8.98(h) x 0.59(d)

About the Author

Lawrence Boland has been teaching at Simon Fraser University since 1966. He has also taught at the University of Wisconsin, Milwaukee and was a visiting professor in the Department of Economics at Boston University. At Capilano College and Vancouver Community College, he taught introductory sociology. He is a Fellow of the Royal Society of Canada. Dr Boland has published six books on economic methodology, including The Foundations of Economic Method: A Popperian Perspective (2003); The Principles of Economics: Some Lies My Teachers Told Me (1992); and The Methodology of Economic Model Building: Methodology after Samuelson (1989).

Table of Contents

1. Microeconomic vs macroeconomic in theoretical model building; 2. On the limitations of equilibrium models in general; 3. On building theoretical models using game theory; 4. On the purpose and limitations of game-theoretic models; 5. Microeconomic vs macroeconomic in empirical model building; 6. On building macroeconometric models; 7. Modeling and forecasting; 8. On the role and limitations of experimental and behavioral economics; 9. The logical adequacy of convincing tests of models using empirical data; 10. The statistical adequacy of convincing tests of models using empirical data; 11. Model building from a philosophy of science perspective; 12. Choosing model-building methods.

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