Friday, October 28, 2011

Computer Models are Always Wrong

The territory is not the map, so it should not be surprising that computer models are always wrong.  It's pretty intuitive (at least to those of us who don't live in a virtual world.)  But for those that do, someone has taken the time to prove it as described in Why Economic Models Are Always Wrong.

So economic models are always wrong.  Big shock there.  It also means that other sophisticated computer models are always wrong as well.  So the next time you hear that computer models predict something, as they say, "don't believe the hype."

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