From Mises Wiki, the global repository of classical-liberal thought
An imaginary construct is a set of false assumptions that are used to form a model of a set of phenomena in an attempt to isolate cause-and-effect relationships. Imaginary constructs are said to be useful if the conclusions derived from them are applicable to reality after the assumptions are dropped.
Examples of imaginary constructs in economics include the evenly rotating economy, perfect competition and the Robinson Crusoe economy.
- ↑ 1.0 1.1 Joseph Salerno "Fundamentals of Economic Analysis: A Causal-Realist Approach", 2007, Lecture 1 Scarcity, Choice, and Value.