There is a popular quote from George Box about all models are wrong, but some models are useful. This quote is many times used by people suggesting some new or innovative approach to a problem that has been around long time.
While this quote has a pithy ring to it, I'm almost certain those using the quote do so without actually reading the book where is was used.
In the early 1970s econometric models had been constructed for a number of countries using time series data. They were largely static, with responses to change assumed to take place within one period, irrespective of whether it was a year or a quarter.
The time series models of Box and Jenkins stood in stark contrast to these naive and static models. The Box and Jenkins used a single variable in isolation and dynamics played the central role. A few studies compared the two approaches and concluded that univariate time series models provided the more accurate short-term forecasts.
This was a turning point because it implied that dynamics were more important for understanding short-run movements than economic relationships as then understood. The emphasis in time series econometrics therefore shifted from modelling large simultaneous systems to taking account of dynamic interactions.
Box and Jenkins were influential not so much because what they said was new, but because they said it well. Their contribution was to show how the dynamic properties of observed series could be matched to those of theoretical models.
The Project Management Point
Models are a critical component of any credible forecast of cost, schedule, and technical performance. Without these models it is actually Guessing as so many critics of estimating are fond of stating. With credible models, forecasting becomes a tool used to increase the probability of project success.
So next time some self-proclaimed person uses Box's quote, ask if they have his book in the shelf and on what page that quote appears.
