An economic model refers to the set of relationships and phenomena can be represented in a much simpler way to demonstrate a set of variables related to the economy.
Types of economic model
In macroeconomic models and microeconomic models is how the economic models themselves are classified.
In particular, macroeconomic models are in charge of the issues that have to do with thebalance of payments, the state of prices at all times and ultimately everything that can do with development and economic growth. Therefore, it is in a way a way of making a diagnosis about the economy of a country. The classification of this type of economic model can be logical, mathematical or computational.
With regard to microeconomic models, they are in charge of studying more specific cases. That is, the diagnosis of this economic model, the well-known micro-units. An example of the cases studied is the price of a specific product, such as food. Therefore, on the order of the day of economic models we will find ourselves in the study carried out on theVALUEand thedemandto determine a conclusion.
Characteristics of the economic model
Any of the economic models will find its basis in economic variables, this means that they allow making stipulations through probability, among other ways, to determine how the future can be. Therefore, economic models can be used for different purposes, but especially in economic terms it is related to politics, since it is what defines the actions of a certain government and the measures it takes to improve the health and economic development of a country through its different entities.
Next we will discover what are the rest of the characteristics of the economic model that should be known:
- As we have commented, the economic models are selective because they always choose the information with which to work from through a selection of those parameters that may be most relevant.
- Economic models must be simple to work correctly with the information and they must be easy to interpret.