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The Construction of Economic Models: An Algebraic Approach

Authors: Yury B. Melnikov, Yelena A. Onokhina and Sergey A. Shitikov

Abstract:

The authors conceptually consider an algebraic approach to the construction of economic models, consisting of the following three components: 1) the system of basic models; 2) the system of standard transformations and combinations of models; 3) the approximation mechanism that allows constructing an adequate model using the basic model and standard transformations and combinations of models. Full implementation of the algebraic approach to the construction of economic models, the concept of which is presented in this paper, should, firstly, provide an efficient mechanism for both economists and business structures developing new economic models, and secondly, establish conditions for a multifaceted structuring of the entire set of economic models. The authors identified seven classes of basic economic models: 1) structural models of economic entities; 2) models of interaction of economic agents; 3) models of properties of economic entities; 4) models of functions of economic entities; 5) models of economic processes; 6) models of management patterns of economic activities and their components; 7) models of behavior of economic agents. The paper briefly describes the first five of them and gives some examples of representing models in the form of typical combinations.

Keywords: economic modeling; classes of economic models; subject of economic activities; algebra of models; simulation theory.

For citation:

Melnikov Yu. B., Onokhina E. A., Shitikov S. A. Ekonomicheskoe modelirovanie: algebraicheskiy podkhod [The Construction of Economic Models: An Algebraic Approach]. Izvestiya Uralskogo gosudarstvennogo ekonomicheskogo universiteta – Journal of the Ural State University of Economics, 2016, no. 4 (66), pp. 137–148.