I was pleased to chat with Sergei Schreider, a hydrological engineer who has turned his talents to modeling hydrological demand systems. Since those models did not match reality very well, he joined forces with economists to add market prices for agricultural products. His team is hoping for better results in the future.
This is not the kind of work I do (I think that markets are too complicated to model; and I don't really care who does what, as long as they face clean incentives), but it reminded my of the CALVIN model that Jay Lund and Richard Howitt use for California water. They connect that model to another one with agricultural output, so there must be some similarities there -- and hopefully not as many flaws!
I was pleased to hear that the teams he works on [see Research Grants on his home page] include people from government ministries, which means that the models are built to be used. Sergei was not interested in speculating how politicians might use the models, since this is a touchy subject. (Of course, a bad model can be worse than no model at all, if it leads one to take actions with confidence that turn out to be badly miscalibrated.)
Listen to our 39 min chat [14MB mp3].
Bottom Line: All models are wrong -- some are useful and some are dangerous.