An abstract representation of the real world that is usually based on scientific theories, principles, and hypotheses. A model is used to analyze economic phenomena by focusing on a small number of essential aspects of the real world. It is then manipulated to derive conclusions and implications that can be applied to the real world.
A model is a handy tool that can be used to investigate phenomena, test hypotheses, and analyze alternative events in a simplified, abstract manner. Abstraction is an important feature of any model. A model captures essential features of the real world, but ignores (hopefully) irrelevant details. For economic models, abstraction generally comes in the form of words, graphs, or equations.