An imaginary construction is defined by Ludwig von Mises as a conceptual image of a sequence of events logically evolved from the elements of action employed in its formation. It is a method of logical deduction resting on the categories of action, that is, of choosing and of setting things aside. Mises writes:
"In confronting the imaginary constructions with reality we cannot raise the question of whether they correspond to experience and depict adequately the empirical data. We must ask whether the assumptions of our construction are identical with the conditions of those actions which we want to conceive."
The method is difficult to use because of the potential for logical errors and therefore must be applied with care and criticism.
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