Policy Advice Derived From Simulation Models

Thomas Brenner () and Claudia Werker

MPRA Paper from University Library of Munich, Germany

Abstract: When advising policy we face the fundamental problem that economic processes are connected with uncertainty and thus policy can err. In this paper we show how the use of simulation models can reduce policy errors. We suggest that policy is best based on so-called abductive simulation models, which help to better understand how policy measures can influence economic processes. We show that abductive simulation models use a combination of theoretical and empirical analysis based on different data sets. This helps inferring empirically reliable and meaningful statements about how policy measures influence economic processes. By way of example we show how research subsidies by the government influence the likelihood that a regional cluster emerges.

Keywords: Policy Advice; Simulation Models; Uncertainty; Methodology (search for similar items in EconPapers)
JEL-codes: C63 B52 H89 B41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp
Date: 2009-01-01
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Journal Article: Policy Advice Derived from Simulation Models (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:13134

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