Economic Models and Human Behavior: The Tension Between Mathematics and Reality

The use of mathematical models in economics has long been a subject of debate, particularly regarding the tension between mathematical precision and the unpredictability of human behavior. This paper critically examines the limitations of over-relying on mathematical models to predict economic outcomes, arguing that such models often fail to account for the social, cultural, and psychological factors that drive economic activities. The analysis highlights how attempts to quantify complex economic behaviors may lead to oversimplifications and inaccurate forecasts, as illustrated by past financial crises and market disruptions. The paper concludes by advocating for a more balanced approach that combines mathematical rigor with an understanding of human behavior to enhance the accuracy and effectiveness of economic predictions.