The Institute Blog

On the Playground: What is a good model in economics?

What is a good model in economics? “The Kids” asked a dozen economists in the halls of the Mount Washington Hotel in Bretton Woods, and we invite you to watch what they said:

Models in Economics

Good models are those that pass the test of time, says Philippe Aghion. Brad DeLong presents what has come to be called Friedman’s “F-Twist”: assumptions don’t matter – a good model is one that predicts well. Wrong, says Anatole Kaletsky, economists ought to model the whole range of human behavior, and doing so requires re-examining the very assumptions on which our models rest. And to George Akerlof, a good model applies to the specific question asked; it corresponds to the problem at hand. Click here to watch the video

More video clips from The Kids: