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Models and Reality: How Did Models Divorced from Reality Become Epistemologically Acceptable?

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Listed:
  • Asad Zaman

    (Professor of Economics, Former Vice Chancellor, Pakistan Institute of Development Economics, Islamabad, Pakistan)

  • Taseer Salahuddin

    (Assistant Professor of Economics, Government Sadiq College Women University, Bahawalpur, Pakistan)

Abstract

This is an introductory article which explains the importance of explicit consideration and modeling of causality, contrary to current econometric practice, in order to use data set for extraction of meaningful information. One of the easiest to understand approaches to causality is via Simpson’s paradox. We will use this paradox, framed in different real-world contexts, to provide an introduction to basic concepts of causality.

Suggested Citation

  • Asad Zaman & Taseer Salahuddin, 2020. "Models and Reality: How Did Models Divorced from Reality Become Epistemologically Acceptable?," International Econometric Review (IER), Econometric Research Association, vol. 12(1), pages 50-74, April.
    • Handle: RePEc:erh:journl:v:12:y:2020:i:1:p:50-74
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    References listed on IDEAS

    as
    1. Asad Zaman, 2010. "Causal Relations via Econometrics," International Econometric Review (IER), Econometric Research Association, vol. 2(1), pages 36-56, April.
    2. Asad Zaman, 2012. "Methodological Mistakes and Econometric Consequences," International Econometric Review (IER), Econometric Research Association, vol. 4(2), pages 99-122, September.
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    6. Asad Zaman, 2015. "Deification of science and its disastrous consequences," International Journal of Pluralism and Economics Education, Inderscience Enterprises Ltd, vol. 6(2), pages 181-197.
    7. Olivier Blanchard, 2016. "Do DSGE Models Have a Future?," Policy Briefs PB16-11, Peterson Institute for International Economics.
    8. Cooter, Robert & Rappoport, Peter, 1983. "Were the Ordinalists Wrong About Welfare Economics?," Working Papers 83-14, C.V. Starr Center for Applied Economics, New York University.
    9. Morgan,Mary S., 2012. "The World in the Model," Cambridge Books, Cambridge University Press, number 9780521176194, May.
    10. Bergmann Barbara R, 2007. "Needed: A New Empiricism," The Economists' Voice, De Gruyter, vol. 4(2), pages 1-4, March.
    11. Cooter, Robert & Rappoport, Peter, 1984. "Were the Ordinalists Wrong about Welfare Economics?," Journal of Economic Literature, American Economic Association, vol. 22(2), pages 507-530, June.
    12. Asad Zaman, 2017. "Lessons in Econometric Methodology: The Axiom of Correct Specification," International Econometric Review (IER), Econometric Research Association, vol. 9(2), pages 50-68, September.
    13. Julian Reiss, 2012. "The explanation paradox," Journal of Economic Methodology, Taylor & Francis Journals, vol. 19(1), pages 43-62, March.
    14. Mehmet Karacuka & Asad Zaman, 2012. "The empirical evidence against neoclassical utility theory: a review of the literature," International Journal of Pluralism and Economics Education, Inderscience Enterprises Ltd, vol. 3(4), pages 366-414.
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    Cited by:

    1. Asad Zaman, 2020. "New Directions in Macroeconomics," International Econometric Review (IER), Econometric Research Association, vol. 12(1), pages 1-23, April.

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    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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