Editing Economic model (section)

{{Short description|Simplified representation of economic reality}}
{{About|theoretical modelling|the overall economic structure of a society|Economic system}}
[[File:Islm.svg|thumb|A diagram of the [[IS/LM model]]]]
{{Economics sidebar}}
An '''[[economics|economic]] model''' is a [[theory|theoretical]] construct representing economic [[wikt:process|processes]] by a set of [[variable (mathematics)|variables]] and a set of [[logic]]al and/or quantitative relationships between them. The economic [[model]] is a simplified, often [[Mathematical model|mathematical]], framework designed to illustrate complex processes. Frequently, economic models posit [[parameter#Statistics and economics|structural parameters]].<ref>Moffatt, Mike. (2008) [[About.com]] ''[http://economics.about.com/od/economicsglossary/g/structuralp.htm Structural Parameters] {{Webarchive|url=https://web.archive.org/web/20160107121857/http://economics.about.com/od/economicsglossary/g/structuralp.htm |date=2016-01-07 }}'' Economics Glossary; Terms Beginning with S. Accessed June 19, 2008.</ref> A model may have various [[exogenous variable]]s, and those variables may change to create various responses by economic variables. Methodological uses of models include investigation, theorizing, and fitting theories to the world.<ref> [[Mary S. Morgan]], 2008 "models," ''[[The New Palgrave Dictionary of Economics]]'', 2nd Edition, [http://www.dictionaryofeconomics.com/article?id=pde2008_M000391 Abstract].<br/>&nbsp;&nbsp; Vivian Walsh 1987. "models and theory," ''The New Palgrave: A Dictionary of Economics'', v. 3, pp. 482–83.</ref>