There's a wide variety of economists. Speaking as someone with Master's degrees in Math & Economics, this sort of simulation is inadequate in many ways. I was

There's a wide variety of economists. Speaking as someone with Master's degrees in Math & Economics, this sort of simulation is inadequate in many ways. I was educated via the Neoclassical approach, where the macroeconomy is modeled through a microeconomic (individual) foundation. What's needed at least is a budget, a utility function (preference relations), and a transition function. The agent then is modeled through optimizing their utility against their budget constraint at each timestep, then the transition function gets applied. Lather, rinse, repeat. This form the basis of a recursion model, the simplest one being the Solow model [1]. More details are available in Recursive Methods in Economic Dynamics by Stokey & Lucas [2]. Computer simulations are definitely used in cases where the models are mathematically intractable. [1]: http://en.wikipedia.org/wiki/Solow_model http://en.wikipedia.org/wiki/Solow_model [2]: http://www.amazon.com/Recursive-Methods-Economic-Dynamics-Stokey/dp/book-citations/0674750969 http://www.amazon.com/Recursive-Methods-Economic-Dynamics-St...