The Ricardian vice refers to abstract modelbuilding and mathematical formulas with unrealistic assumptions. In simpler terms, the Ricardian vice is the tendency for economists to make and test theories that aren't troubled by the complexities of reality, resulting in theories that are mathematically beautiful but largely useless for practical applications. The Ricardian vice is prevalent in economics and is named after David Ricardo, one of the first economists to bring mathematical rigor to the discipline.
David Ricardo came up with many useful theories and laws that defended free trade and sound monetary policies, including them the law of comparative advantage and the law of diminishing returns. As time passed, however, Ricardo depended more and more on modelbuilding and large (sometimes erroneous) assumptions to achieve the results he wished.
For example, Ricardo focused on the distribution of income rather than the growth of economic activity to "prove" that everyone but landlords was doomed to subsistence wages. He also spent time seeking an ironclad measure of value, trying to link it to the cost of labor while calculating out any benefits of machine labor. Even in his law of diminishing returns, Ricardo simplified all agricultural crops into one field all farmed with the same technique and having an equal yield on all sections. Adding to these already sizable assumptions, he factored the cost of wages as being equal to the subsistence level that he believed to be unavoidable. While it yielded a result that showed that tariffs harm the domestic economy, it oversimplified the case.
Even today, many economic models mathematically remove, simplify, or fix dynamic components like competition with an arbitrary value. While these exercises in pure deductive reasoning can yield useful clues about how things might work, they need to be held against the way things actually work to have any value.
For more insight, read How Influential Economists Changed Our History.

Why do economists build assumptions into their economic models?
When you look at an introductory textbook for microeconomics, it seems as though economists live in a world that barely resembles ... Read Full Answer >> 
What is comparative advantage?
Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >> 
Do plane tickets get cheaper closer to the date of departure?
The price of flights usually increases one month prior to the date of departure. Flights are usually cheapest between three ... Read Full Answer >> 
Is Colombia an emerging market economy?
Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >> 
What assumptions are made when conducting a ttest?
The common assumptions made when doing a ttest include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >> 
What are some of the more common types of regressions investors can use?
The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >>

Economics
The Truth about Productivity
Why has labor market productivity slowed sharply around the world in recent years? One of the greatest economic mysteries out there. 
Markets
The (Expected) Market Impact of the 2016 Election
With primary season upon us, investor attention is beginning to turn to the upcoming U.S. presidential election. 
Term
How Statistical Significance is Determined
If something is statistically significant, it’s unlikely that it happened by chance. 
Economics
3 Charts All Investors Should See
Given the abysmal start to the year, the defining question is whether this is another painful but temporary correction, or the start of a bear market. 
Investing
2 Opportunities Amid Today’s Market Volatility
As you prepare your portfolio for the market volatility ahead this year, here are a few investing ideas to consider. 
Mutual Funds & ETFs
(EWT, FTW, QTWN) 3 Best Taiwan ETFs for 2016
Examine detailed analysis of three exchangetraded funds that track the Taiwan equity market, and learn about the characteristics and suitability of these ETFs. 
Mutual Funds & ETFs
(ENOR, NORW) 2 Best Norway ETFs for 2016
Learn about the top two exchangetraded funds, or ETFs, that track the Norway equity market, and explore analyses of their characteristics and suitability. 
Mutual Funds & ETFs
(AFK, EZA, GAF) 3 Best Africa ETFs for 2016
Explore detailed analysis of the top three exchangetraded funds that track the African companies, and learn the type of investors these ETFs and suitable for. 
Economics
Understanding Statistics
Statistics provide the means to analyze data and then summarize it into a numerical form. 
Insurance
Calculating Yearly Probability of Dying
The yearly probability of dying is a figure that predicts annual death rates for a population.

IRR Rule
A measure for evaluating whether to proceed with a project or ... 
Rule Of 72
A shortcut to estimate the number of years required to double ... 
Black Swan
An event or occurrence that deviates beyond what is normally ... 
Contagion
The spread of market changes or disturbances from one region ... 
Metrics
A wide variety of tools that managers and executives can use ... 
Qualitative Analysis
Securities analysis that uses subjective judgment based on nonquantifiable ...