Methodological Issues and Models in 'History Friendly' Simulations

Simulation techniques have proliferated a lot in the last years. In economics the industrial dynamics approach makes use of simulation techniques to understand the complexity of the industrial process of continuous change. Among these models, a new branch of studies called History-friendly models aims at establishing a close link between formal theory, developing stand-alone theoretical simulation models, and empirical evidence, as it stems from a rigorous study of the economic environment under exam. The paper aims to give a methodological contribution to the History-friendly methodology. We discuss the flexibility of simulation techniques in representing complex environments. We analyse the relationship between empirical evidence and the implementation of the simulation model. We study History-friendly analyses and counterfactuals. A contribution to define the role of History-friendly models in the debate about empirical validation of simulations is given. Finally, some examples of History-friendly models are examined