Much like researchers in other sciences, such as physics and biology, economists develop theories and models to describe the world based on observed phenomena. Methods of testing such theories, however, differ greatly based on the applicability and feasibility of controlled lab experiments.

Unlike physicists and biologists, economists typically cannot run controlled laboratory experiments to generate data to test their models and theories. This is especially true of models describing the macro economy, such as those relating to the price level, the inflation rate, and the unemployment rate. If an economist wanted to test the model relating the price level to the money supply, it is unlikely the Federal Reserve would allow the economist to vary the money supply (and potentially drastically affect the economy) simply to test an economic theory. Rather, an economist would likely have to look at available data on previous changes in the money supply and how the price level changed in response.