Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/194875 
Year of Publication: 
2019
Series/Report no.: 
Economics Discussion Papers No. 2019-23
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Both mathematical modelling and simulation methods in general have contributed greatly to understanding, insight and forecasting in many fields including macroeconomics. Never-theless, we must remain careful to distinguish model-land and model-land quantities from the real world. Decisions taken in the real world are more robust when informed by our best estimate of real-world quantities, than when "optimal" model-land quantities obtained from imperfect simulations are employed. The authors present a short guide to some of the temptations and pitfalls of model-land, some directions towards the exit, and two ways to escape.
Subjects: 
modelling and simulation
decision-making
model evaluation
uncertainty
structural model error
dynamical systems
radical uncertainty
JEL: 
C52
C53
C6
D8
D81
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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