Policy Advice Derived From Simulation Models
AbstractWhen advising policy we face the fundamental problem that economic processes are connected with uncertainty and thus policy can err. In this paper we show how the use of simulation models can reduce policy errors. We suggest that policy is best based on so-called abductive simulation models, which help to better understand how policy measures can influence economic processes. We show that abductive simulation models use a combination of theoretical and empirical analysis based on different data sets. This helps inferring empirically reliable and meaningful statements about how policy measures influence economic processes. By way of example we show how research subsidies by the government influence the likelihood that a regional cluster emerges.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13134.
Date of creation: 01 Jan 2009
Date of revision:
Policy Advice; Simulation Models; Uncertainty; Methodology;
Other versions of this item:
- Thomas Brenner & Claudia Werker, 2009. "Policy Advice Derived from Simulation Models," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(4), pages 2.
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- H89 - Public Economics - - Miscellaneous Issues - - - Other
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
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- Thomas Brenner & Claudia Werker, 2007. "A Taxonomy of Inference in Simulation Models," Computational Economics, Society for Computational Economics, vol. 30(3), pages 227-244, October.
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- Schwerin, Joachim & Werker, Claudia, 2003. "Learning innovation policy based on historical experience," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 385-404, December.
- Thomas Brenner & AndrÃ© MÃ¼hlig, 2007. "Factors and Mechanisms Causing the Emergence of Local Industrial Clusters - A Meta-Study of 159 Cases," Papers on Economics and Evolution 2007-23, Max Planck Institute of Economics, Evolutionary Economics Group.
- Thomas Brenner, 2001. "Simulating the Evolution of Localised Industrial Clusters - an Identification of the Basic Mechanisms," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 4(3), pages 4.
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