Abstract

The practice of economic science is dominated by model building. To evaluate economic policy, models are built and used to produce numbers to inform us about economic phenomena. Although phenomena are detected through the use of observed data, they are in general not directly observable. To 'see' them we need instruments. More particularly, to obtain numerical facts of the phenomena we need measuring instruments. This paper will argue that in economics models function as such instruments of observation, more specific as measuring instruments. In measurement theory, measurement is a mapping of some class of aspects of characteristics of the empirical world into a set of numbers. The paper's view is that economic modelling is a specific kind of mapping to which the standard account on how models are obtained and assessed does not apply. Models are not easily or simply derived from theories and subsequently tested against empirical data. Instruments are constructed by integrating several theoretical and empirical ideas and requirements in such a way that their performance meets a beforehand chosen standard. The empirical requirement is that the model should take account of the phenomenological facts, so that the reliability of the model is not assessed by post-model testing but obtained by calibration