Some Caveats for the Use of Forecating Models for Assessing Rates of Return in Workers’ Compensation
A model, in the most general sense, is a simplified representation of reality, as it is, or as it is to come to be. The reality of interest may be a phenomenon, a system, a process, a living thing, that is, virtually anything. The simplification embodied in the representation may range from slight to extensive, from simple to highly sophisticated. All models are incorrect in some way; some models are useful; all, even good and correct models, are capable of being used in an inappropriate way. Complex economic models that have not been appropriately validated, preferably in at least two ways, are particularly dangerous.
KeywordsCash Flow Compensation Insurance Accounting Information System Average IRRs Compensation Line
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