Journal Article
No. 2019-40 | October 08, 2019
Escape from model-land


Both mathematical modelling and simulation methods in general have contributed greatly to understanding, insight and forecasting in many fields including macroeconomics. Nevertheless, 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 estimation of real-world quantities with transparent uncertainty quantification, than when based on “optimal” model-land quantities obtained from simulations of imperfect models optimized, perhaps optimal, in model-land. 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. Their aim is to improve decision support by providing relevant, adequate information regarding the real-world target of interest, or making it clear why today’s model models are not up to that task for the particular target of interest.

JEL Classification:

C52, C53, C6, D8, D81


  • Downloads: 1655 (Discussion Paper: 1236)


Cite As

Erica L. Thompson and Leonard A. Smith (2019). Escape from model-land. Economics: The Open-Access, Open-Assessment E-Journal, 13 (2019-40): 1–15.

Comments and Questions

Anonymous - Escape from Model-Land--an impossible suggestion
April 20, 2020 - 15:47

A Theoretical presentation of a macroeconomics situation can only be presented as a conception by the use of a model. So logically, this paper implies that although we want to provide and to study for better understanding some facts about our social system, it is impossible to do so! As ...[more]

... soon as I select a topic about which to write and discuss, a model must be created in the mind's eye of the person receiving my proposal. In the case of a technical subject of which macroeconomics surely comprises, this is a vital way for two parties to exchange information, so I find this present paper to be absurd. I am attaching a paper about modeling our social system in the most simple yet comprehensive way and i would like the author of the "Escape from Model-Land" to explain why it is not applicable to this previously badly confused subject.