Simulation models have become increasingly popular in economics in the last two decades, because they can deal with a wide range of research questions. The set-up and analysis of simulation models can range from very specific to very general and can be underpinned by different combinations of theoretical considerations and empirical data. We offer a taxonomy of existing simulation approaches and show how their results can be used to explain observed economic features, examine economic systems and predict future economic processes. Moreover, we offer a new type of method that helps to better exploit empirical findings in simulation models.
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Brenner, T., Werker, C. A Taxonomy of Inference in Simulation Models. Comput Econ 30, 227–244 (2007). https://doi.org/10.1007/s10614-007-9102-6
- Simulation models
- Empirical data