Nominal Versus Real Models
Channel: Asad Zaman
Date: 2024-02-09

{writeup: bit.ly/MONE03} Monetary History is a sequence of specific events. To derive lessons from history, one must build models which abstract from the specifics to get at underlying real structures which are responsible for the dynamics of history. In building such models, there are two radically different strategies. The nominal strategy, currently dominant in economic methodology, considers models to be good if they match the observations. The realist strategy attempts to build models of the hidden underlying causal and institutional factors which create the observations. This video lecture explains the advantages of the realist strategy, using agent based models, to develop an understanding of our monetary history.