An economic model attempts to abstract from complex human behavior in a way that sheds some insight into a particular aspect of that behavior. This process inherently ignores important aspects of real-world behavior, making the modeling process an art as well as a mathematical exercise.
The expression of a model can be in the form of words, diagrams, or mathematical equations, depending on the audience and the point of the model.
The Classic Economic Models collection emphasizes the role of diagrammatic economic models in describing optimizing behavior.
Classic Economic Models
Interactive presentations of the most important models
in microeconomics and macroeconomics go beyond
anything appearing in a printed-on-paper textbook.
Learn to think like an economist.
Balance of Payments
Endogenous Technical Change
Federal Funds (Fed Funds) Rate
Fixed Exchange Rate
Floating Exchange Rate
Gross Domestic Product (GDP)
Production Possibility Frontier
Reservation Wage Rate
Theory of the Consumer
Theory of the Firm
Velocity of Money