"Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time. The object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the latter, and of understanding the time sequences to which they give rise in particular cases." (John M Keynes, [letter to Roy Harrod] 1938)
"The striking parallel between the economic models that are currently under discussion and some engineering systems suggests the hope that in some way the rapid progress in the development of the theory and practice of automatic control in the world of engineering may contribute to the solution of the economic problems." (Arnold Tustin "The Mechanism of Economic Systems", 1953)
"The construction of an economic model, or of any model or theory for that matter (or the writing of a novel, a short story, or a play) consists of snatching from the enormous and complex mass of facts called reality, a few simple, easily-managed key points which, when put together in some cunning way, become for certain purposes a substitute for reality itself." (Evsey Domar, "Essays in the Theory of Economic Growth", 1957)
"One of the most important skills of the economist, therefore, is that of simplification of the model." (Kenneth Boulding, "The Skills of the Economist", Journal of Political Economy 67 (1), 1959)
"In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magnifies the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback - increasing returns - makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the 'best' one." (W Brian Arthur, "Increasing Returns and Path Dependence in the Economy", 1994)
"What is a mathematical model? One basic answer is that it is the formulation in mathematical terms of the assumptions and their consequences believed to underlie a particular ‘real world’ problem. The aim of mathematical modeling is the practical application of mathematics to help unravel the underlying mechanisms involved in, for example, economic, physical, biological, or other systems and processes." (John A Adam, "Mathematics in Nature", 2003)
"The long term solution to the financial crisis is to move beyond the ‘growth at all costs’ economic model to a model that recognizes the real costs and benefits of growth." (Robert Costanza, "Toward a New Sustainable Economy", 2008)
"Real economic efficiency implies including all resources that affect sustainable human well-being in the allocation system, not just marketed goods and services. Our current market allocation system excludes most non-marketed natural and social capital assets and services that are critical contributors to human well-being. The current economic model ignores this and therefore does not achieve real economic efficiency. A new, sustainable ecological economic model would measure and include the contributions of natural and social capital and could better approximate real economic efficiency." (Robert Costanza, "Toward a New Sustainable Economy", 2008)
"Economists also use models to learn about the world, but instead of being made of plastic, they are most often composed of diagrams and equations. Like a biology teacher’s plastic model, economic models omit many details to allow us to see what is truly important. Just as the biology teacher’s model does not include all the body’s muscles and capillaries, an economist’s model does not include every feature of the economy." (N Gregory Mankiw, "Principle of Economics" 6th ed., 2012)
"Many of the stories economists tell take the form of models - for whatever else they are, economic models are stories about how the world works." (Paul Krugman & Robin Wells, "Economics" 3rd Ed., 2013)
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