In the material that follows, I comment on model building from the viewpoint of its effectiveness in predicting economic behavior and its value as a guide to the management of industrial organizations and the establishment of operating policies and organizational structure. I am referring throughout to models describing sequences of events progressing in time and not mathematical models for describing a static set of relationships.

Although the text is written in a somewhat critical manner, I look on most of the statements as propositions for further consideration and discussion rather than as facts which I accept at face value. While my general propositions suggest that current economic model design techniques are not progressing in the most fruitful direction, it is certainly true that those avenues needed to be explored, that most of the efforts represent some progress, and that they provide a foundation from which we can hope to build a better system of economic and industrial firm models using techniques and machines which have become available in the last decade. Copyright © 2003 John Wiley & Sons, Ltd.