Abstract:
A scientific study of economics is done by a theoretic model and empirical verification. A theoretical model contains at least three elements, including background of the theoretical model (or restrictive conditions for the model), the theorized point itself and artistic representations in form of mathematic model and the like. Moreover, a scientific theoretical model cannot be verified but by a “double” process of logical verification and empirical verification. In the process of verification, the key exogenous variable must be discovered from among the many explanatory variables of the model. Only in terms of the exogenous variable can a practical solution to the problem be put forward, which will offer results of economic study with “explanatory function” and “predicting function” in a traditional sense and “policy function” in practice. It is only by this means that a real scientific economic study, which has to go through the steps of raising, analyzing and solving the problem, can cover a complete process of exploration and fulfill its historical mission of “stabilizing society and consoling people”.
