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Any mathematical formula or other structure that economists use to explain or predict occurrences. Economists test their models with real world facts before they gain wide acceptance, but, even then, there is no guarantee that a model will always be a correct predictor. See also: Model risk.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An abstraction of reality, generally referring in investments to a mathematical formula designed to determine security values. Economists also use models to project trends in economic variables such as interest rates, economic activity, and inflation rates.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
modelsee ECONOMIC MODEL.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005