System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach
In areas from medicine to climate change to economics, we are faced with huge challenges and a need for accurate forecasts, yet our ability to predict the future has been found wanting. The basic problem is that complex systems such as the atmosphere or the economy cannot be reduced to simple mathem...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Journal article |
| Language: | English |
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Elsevier
2009
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| Subjects: |
| _version_ | 1826279448967643136 |
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| author | Orrell, D McSharry, P |
| author2 | International Institute of Forecasters |
| author_facet | International Institute of Forecasters Orrell, D McSharry, P |
| author_sort | Orrell, D |
| collection | OXFORD |
| description | In areas from medicine to climate change to economics, we are faced with huge challenges and a need for accurate forecasts, yet our ability to predict the future has been found wanting. The basic problem is that complex systems such as the atmosphere or the economy cannot be reduced to simple mathematical laws and modeled accordingly. The equations in numerical models are therefore only approximations to reality, and are often highly sensitive to external influences and small changes in parameterisation - they can be made to fit past data, but are less good at prediction. Since decisions are usually based on our best models of the future, how can we proceed? This paper draes a comparison between two apparently different fields: biology and economics. In biology, drug development is a highly inefficient and expensive process, which in the past has relied heavily on trial and error. Institutions such as pharmaceutical companies and universities are now radically changing their approach and adopting techniques from the new field of systems biology to integrate information from disparate sources and improve the development process. A similar revolution is required in economics if models are to reflect the nature of human economic activity and provide useful tools for policy makers. We outline the main foundations for a theory of systems economics. |
| first_indexed | 2024-03-06T23:58:53Z |
| format | Journal article |
| id | oxford-uuid:753b02cb-62a7-4d93-879a-a74635d0e2f9 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T23:58:53Z |
| publishDate | 2009 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:753b02cb-62a7-4d93-879a-a74635d0e2f92022-03-26T20:07:57ZSystem economics: overcoming the pitfalls of forecasting models via a multidisciplinary approachJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:753b02cb-62a7-4d93-879a-a74635d0e2f9EconomicsDecision scienceBiologyEnglishOxford University Research Archive - ValetElsevier2009Orrell, DMcSharry, PInternational Institute of ForecastersIn areas from medicine to climate change to economics, we are faced with huge challenges and a need for accurate forecasts, yet our ability to predict the future has been found wanting. The basic problem is that complex systems such as the atmosphere or the economy cannot be reduced to simple mathematical laws and modeled accordingly. The equations in numerical models are therefore only approximations to reality, and are often highly sensitive to external influences and small changes in parameterisation - they can be made to fit past data, but are less good at prediction. Since decisions are usually based on our best models of the future, how can we proceed? This paper draes a comparison between two apparently different fields: biology and economics. In biology, drug development is a highly inefficient and expensive process, which in the past has relied heavily on trial and error. Institutions such as pharmaceutical companies and universities are now radically changing their approach and adopting techniques from the new field of systems biology to integrate information from disparate sources and improve the development process. A similar revolution is required in economics if models are to reflect the nature of human economic activity and provide useful tools for policy makers. We outline the main foundations for a theory of systems economics. |
| spellingShingle | Economics Decision science Biology Orrell, D McSharry, P System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title | System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title_full | System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title_fullStr | System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title_full_unstemmed | System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title_short | System economics: overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| title_sort | system economics overcoming the pitfalls of forecasting models via a multidisciplinary approach |
| topic | Economics Decision science Biology |
| work_keys_str_mv | AT orrelld systemeconomicsovercomingthepitfallsofforecastingmodelsviaamultidisciplinaryapproach AT mcsharryp systemeconomicsovercomingthepitfallsofforecastingmodelsviaamultidisciplinaryapproach |