Imaginary Machines

Abstract

This chapter argues that about half of the Nobel Prize winners have engaged primarily in the building of intellectual constructs, imaginary machines, or simply ‘models’. This term should be understood as in ‘model aircraft’. Unlike model aircraft, economic models mostly remain on paper, usually in the form of mathematical equations, but mechanical analogues can be constructed. The Phillips MONIAC hydraulic computer, for instance, simulated the circular flow of money in the economy by means of coloured water in glass pipes, with valves which permitted policy choices to be simulated. Hence, the chapter shows that even economic literature is largely speculative, involving ‘an apparently inconclusive exploration of possible worlds’.