Economic Sciences: on the Autobahn, or on the Road to Nowhere?

Abstract

Model building is a fundamental activity in economic science. Addressing the complexities of representing the real world has resulted in significant methodological advances, which in turn play an important role in furthering the field. However, what is not as well appreciated is that there is another type of modeling involved in this activity. While the econometric models are explicitly presented and open for inspection, the other model, called the mental model, is tacit, personal, and only rarely subjected to scrutiny. The two models are not independent, mental models define the framework within which the public econometric models are developed and understanding the nature of this interaction is important for the further development of economic sciences. There have are signals that the traditional approach to economic modeling is insufficient to meet the needs given current developments in understanding human behavior and policy analysis. The resistance to change has many possible causes, in this paper we briefly consider the role that mental models play in this development process and point to some alternative approaches that may be better suited to meet current modeling needs.