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,...

This paper introduces a categorization of simulation models. It provides an explicit overview of the steps that lead to a simulation model. We highlight the advantages and disadvantages of various simulation approaches by examining how they advocate different ways of constructing simulation...

This paper introduces a categorization of simulation models. It provides an explicit overview of the steps that lead to a simulation model. We highlight the advantages and disadvantages of various simulation approaches by examining how they advocate different ways of constructing simulation...

When advising policy we face the fundamental problem that economic processes are uncertain. Consequently, policy can err. In this paper we show how the use of simulation models can reduce policy errors by inferring empirically reliable and meaningful statements about economic processes. We...

Simulations have become a common tool to study the implications of theoretical models. In addition, computational approaches are frequently used in statistics to adapt models to reality. We aim to merge these approaches. To obtain robust results with significant validity from simulations,...