modelling

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A somewhat frequent criticism of common economic theories and frameworks is that they are isolated from real world concerns such as energy and resource constraints: that the concept of limited resources, and ideas like the second law of thermodynamics, simply don’t seem to affect the economics at all. You come across this criticism primarily at […] Read more

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Here’s a long but fascinating post on deciphering the opening chord in A Hard Day’s Night. Along the way it gives a good explanation of Fourier transforms for the non-mathematician. It also gives a really good example of why it’s important to look at the overall reasonableness of a result, rather than blindly relying on […] Read more

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Antonio Fatas has some interesting things to say about the reliance of economic models on implausible assumptions. All models rely on assumptions and economic models are known (and made fun of) for relying on very strong assumptions about rationality, perfect information,… Many of these assumptions are unrealistic but they are justified as a way to […] Read more

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There’s a bit of a furore going on at the moment: it turns out that a controversial paper in the debate about the after-effects of the financial crisis had some peculiarities in its data analysis. Rortybomb has a great description, and the FT’s Alphaville and Tyler Cowen have interesting comments. In summary, back in 2010 […] Read more

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Last autumn I was at an actuarial event, listening to a presentation on the risks involved in a major civil engineering project and how to price possible insurance covers. It must have been a GI (general insurance), event, obviously. That’s exactly the sort of thing GI actuaries do. The next presentation discussed how to model […] Read more

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On 1 March I gave the Worshipful Company of Actuaries lecture at Heriot-Watt University. Here’s the abstract: Being an actuary nowadays is all about modelling, and in this lecture I’ll discuss how we should go about it. We all know that all models are wrong but some are useful – what does this mean in […] Read more

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Ok, it’s a bit trite, but human behaviour is really important, and a good understanding of human behaviour is a goal for people in many different fields. Marketing, education and social policy all seek to influence our behaviour in different ways and for different purposes — that’s surely what the whole Nudge thing is all […] Read more

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Well, some of it, anyway. There’s been quite a lot of coverage in on the web recently about Benford’s law and the Greek debt crisis. As I’m sure you remember, Benford’s law says that in lists of numbers from many real life sources of data, the leading digit isn’t uniformly distributed. In fact, around 30% […] Read more

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