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.


yoo said...

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

Taro said...


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...