Friday, August 01, 2008

Why Economists Use Models?

When I was at Osaka University, my professor told me the reason why economists use unreal models as an explanation of reality.

He quoted from a great British economist of the 20th century,

A model which took account of all the variegation of reality would be of no more use than a map at the scale of one to one. Joan Robinson (1962)

Since then, I've tried to study the tools of dynamic optimization.

variegation: –noun
1. an act of variegating.
2. the state or condition of being variegated; varied coloration.
Random House Unabridged Dictionary, © Random House, Inc. 2006.

2 comments:

yoo said...

yep~ that was also my question:)
now I'm still struggeling with various pricing models in my study
*_*

Taro said...

yoo,

Me too, but we can see something interesting and valuable in the process of building models, and that's why we try hard to build it...