[thomaspaine]

>in the world of calibration in macroeconomic models, the creator of the model is now testing data against theory by tuning parameters to values they think are good. It is completely backwards.

This is a little inaccurate, the purpose of these macroeconomic models is either to make future predictions or run simulations to see what happens when exogenous shocks occur. They're not "testing data against theory", the data is used for parameter estimation and then verifying the accuracy of the models. It's actually very similar to the way certain AI models are developed and trained.

I do agree that these models are usually pretty inaccurate and somewhat useless though.