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The Hierarchy of Modelling Techniques

In: Tax Modelling for Economies in Transition

Author

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  • Paul Bernd Spahn

    (Goethe University)

Abstract

Economic simulation models—of which tax models form a subgroup—can be established at various levels of aggregation. They can be extremely simple and they may achieve high levels of specification and sophistication. In essence, even a crude ‘back-of-the-envelope’ calculation could be considered a model. However, this would not suit well for simulation purposes because it cannot account for more complex relationships, and it does not allow the timely updating and repetitive analysis of any data relevant for a simulation exercise. The same is true for simple arithmetic operations performed manually on a desk calculator.

Suggested Citation

  • Paul Bernd Spahn, 1998. "The Hierarchy of Modelling Techniques," Palgrave Macmillan Books, in: Paul Bernd Spahn & Mark Pearson (ed.), Tax Modelling for Economies in Transition, chapter 3, pages 33-43, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-14109-8_3
    DOI: 10.1007/978-1-349-14109-8_3
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