QUALITATIVE AND QUANTITATIVE SIMULATION OF INTERACTING MARKETS

Traditional quantitative methods of analysis and simulation are compar ed with recently developed techniques in qualitative simulation by usi ng as a case-study a simple dynamic model of the interacting markets f or housing and mortgages. Analysis by the different techniques shows t hat while the qualitative simulation requires less detailed models, of the precision normally available in practice, it results in ambiguous descriptions of behaviour that for certain initial conditions can obs cure the true behaviour. By contrast, quantitative simulation produces a unique precise behaviour, but in requiring excessively specific inf ormation of the modeller it may produce an inaccurate if precise outco me.