The faithful model assumption implies the nonlinear model state space is a faithful representation of the possibilities in the physical space of the target system

Of course, we do not have perfect models. But even if we did, they are unlikely to live up to our intuitions about them (Judd and Smith 2001; Judd and Smith 2004). For example, no matter how many observations of a system are made, there still will be a set of trajectories in the model state space that are indistinguishable from the actual trajectory of the target system. Indeed, even for infinite past observations, we cannot eliminate the uncertainty in the epistemic states given some unknown on