Electronic/World Wide Web>Internet Article:  Freedman, David H. (October 26, 2011), Why Economic Models Are Always Wrong, Retrieved on 2013-12-27
  • Source Material [www.scientificamerican.com]
  • Folksonomies: economics predictions

    Memes

    27 DEC 2013

     Why Economists Will Continue to be Wrong

    Carter had initially used arbitrary parameters in his perfect model to generate perfect data, but now, in order to assess his model in a realistic way, he threw those parameters out and used standard calibration techniques to match his perfect model to his perfect data. It was supposed to be a formality--he assumed, reasonably, that the process would simply produce the same parameters that had been used to produce the data in the first place. But it didn't. It turned out that there were many ...
      1  notes

    They make models based on past data, and when they fail to predict the future, they adjust them to match the new past data. The problem is that so many models will match the past data, there could be no end to the number of models they throw out.