Monday, February 16, 2015

Economy Simulations are Never Perfect

In ecology, there can be various mathematical models attempting to explain observed phenomena. Such models are not meant to be perfect, but can help us in understanding and predicting reality.

Similarly, in the business world, it is possible to construct ever more sophisticated mathematical models to simulate the dynamics of the economy. Such models are never perfect yet they do help us in understanding the dynamics of the economy and help us in prediction and thus decision making.