economic model
Theoretical financial system
An economic model is a simplified representation of economic processes or relationships, using assumptions and variables to analyze how systems work or predict outcomes.
Models range from basic supply-and-demand diagrams to complex mathematical simulations.
The economic model predicted inflation would rise with increased money supply.
Critics note that models inevitably sacrifice real-world complexity for analytical clarity.
Price-determining economic forces
- equilibriumState of balance
- pricingEstablishing monetary amounts charged
- competitionStruggle for supremacy
- monopolyOne seller, no substitutes
oligopoly · commodities · exchange · trade · auction · clearing · arbitrage · market power
Imitation of real processes
- calibrationAdjusting for measurement accuracy
- parametersDefined boundaries or constraints
- variablesChangeable elements in equations
- optimizationMaximizing efficiency or performance
sensitivity · validation · estimation · econometrics · regression · computational · quantitative · algorithmic
National output abbreviation
- inflationSustained price level increase
- unemploymentBeing without paid work
- fiscal policyState spending and taxation
- monetary policyCentral bank economic controls
recession · growth · business cycle · central bank · exchange rate · trade balance · national income · deficit
Reviving ancient aesthetic principles
- KeynesianPro-intervention economic theory
- MarxianOf that economist's theories
- AustrianFrom the Alpine republic
- monetaristMoney-supply-first economist
institutional · classical · supply-side · comparative advantage · Malthusian · heterodox · orthodox · assumptions
Functional worth or purpose
- elasticityTendency to resume original form
- consumer choiceBuyer's range of alternatives
- budget constraintMaximum allowable expenditure
- perfect competitionFrictionless market ideal
market failure · externalities · public goods · diminishing returns · rational choice
Setbacks sting more than gains please
- nudgeGentle push to prompt
- heuristicsPractical problem-solving shortcuts
- biasesUnfair inclinations toward something
- anchoringFastening securely to position
mental accounting · reciprocity · fairness · trust · cognitive load · satisficing · anomalies · irrationality
Estimating future conditions
- projectionSomething that extends outward
- trendDirection of change
- outlookAttitude toward the future
- leading indicatorsStatistics forecasting economic direction
nowcasting · extrapolation · confidence interval · baseline · counterfactual · accuracy · uncertainty
supply and demand
Price-determining economic forces
- equilibriumState of balance
- pricingEstablishing monetary amounts charged
- competitionStruggle for supremacy
monopoly · oligopoly · commodities · exchange · trade · auction · clearing · arbitrage · market power · barriers to entry
simulation
Imitation of real processes
- calibrationAdjusting for measurement accuracy
- parametersDefined boundaries or constraints
- variablesChangeable elements in equations
optimization · sensitivity · validation · estimation · econometrics · regression · computational · quantitative · algorithmic · stochastic
GDP
National output abbreviation
- inflationSustained price level increase
- unemploymentBeing without paid work
- fiscal policyState spending and taxation
monetary policy · recession · growth · business cycle · central bank · exchange rate · trade balance · national income · deficit · multiplier
neoclassical
Reviving ancient aesthetic principles
- KeynesianPro-intervention economic theory
- MarxianOf that economist's theories
- AustrianFrom the Alpine republic
monetarist · institutional · classical · supply-side · comparative advantage · Malthusian · heterodox · orthodox · assumptions · axioms
utility
Functional worth or purpose
- elasticityTendency to resume original form
- consumer choiceBuyer's range of alternatives
- budget constraintMaximum allowable expenditure
perfect competition · market failure · externalities · public goods · diminishing returns · rational choice
loss aversion
Setbacks sting more than gains please
- nudgeGentle push to prompt
- heuristicsPractical problem-solving shortcuts
- biasesUnfair inclinations toward something
anchoring · mental accounting · reciprocity · fairness · trust · cognitive load · satisficing · anomalies · irrationality
forecasting
Estimating future conditions
- projectionSomething that extends outward
- trendDirection of change
- outlookAttitude toward the future
leading indicators · nowcasting · extrapolation · confidence interval · baseline · counterfactual · accuracy · uncertainty
- modelssupermodel, spokesmodel, cover girl, mannequin, neural net
- mathematical modelsdifferential equation
economic modeleconomic history
Analysis of past material conditions
case study · empirical observation · raw data · inductive reasoning · anecdotal evidence
model, economy, economic, modeling, economical, economics, modeled, ecology, economize