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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

I gather that the two first question marks are largely rhetoric,
and in any case I agree with the answer he gives in the next sentence.
 To paraphrase, the construction of economic theories is one
thing (namely, the theoretical part of model building), and to confront
 it with the facts is something different (namely, the empirical
part of model building). Thus at this point I would only emphasize
more clearly that although the theoretical and empirical aspects of
model building should be kept distinct, at least in principle, we
should always keep in mind that a fullfledged scientific model is
a synthesis of theoretical and empirical knowledge.
As to the second group of Professor HAAVELMO’s question marks,
it seems to me that they will get clearcut answers if the model
builder has taken care to specify in not too vague terms for what
broad array of facts, applications, his model is designed to be valid,
and if the applications include policy making he should specify
what changes in policy, if any, it is the purpose of the model to
cover. If not for anything else, such specification is essential when
it comes to the verification and testing of the model. Furthermore,
the spectrum of potential changes of policy, is extremely wide, and
the substance of a model would in many cases become too diluted
if the model tried to cover more than a relatively small sector of
potential changes. For example, a relation of consumer demand
may remain the same under very different regimes of economic
policy, whereas many other parts of economic life are quite susceptible
 even to small changes of policy.
A more specific reply to the last sentence of Professor
HAAVELMO’s comments is that in case an economic forecasting model
‘nfluences government policy, this creates a feedback problem which
n principle belongs under the construction of a more comprehensive
model that includes the interaction between forecasting and policy.
Feedback phenomena may be more or less difficult to handle, but
even if they are difficult they do not make model building impossible.
 For example, feedback models are commonplace in the theory
of servomechanisms.
Since the argument about a change in policy has been in fre-2]

 Wold - pag. 64