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TO ECONOMISTS. Let me make it clear…

TO ECONOMISTS. Let me make it clear. I am as orthodox neoclassical economist as they make them, not a fringe heterodox or something. I just do not like unreliable models that use *some* math like regression and miss a layer of stochasticity, and get wrong results, and I hate sloppy mechanistic reliance on bad statistical methods. I do not like models that fragilize. I do not like models that work on someone’s computer but not in reality. This is standard economics. I showed in 1.7 that we cannot use standard deviations and it is not a matter of taste. Being an economist does not mean being a turkey. Yet all economists persist in these bogus methods.

I will show in Volume 2 of FT & AF how Markowitz and Samuelson-Merton optimization blow you up. Refusing a model that blow you up is as orthodox economics as one can get.

I want to take the charlatanism out of economics and there is a way to do it: examine layers of stochasticity. Detect fragility, and remove offending model.

Nor do I like to be closely associated with behavioral economics. I go ballistic every time a fringe economics group invites me to give a lecture. Kapish?

.

And finally although I do not want to be an academic, EVERYTHING of substance in the text has been peer-reviewed (or is in the process of peer reviewed) in Quant/Math/Stat journals.

Thanks

See the test > pages 100 in https://docs.google.com/file/d/0B_31K_MP92hURjZxTkxUTFZnMVk/edit

via TO ECONOMISTS. Let me make it clear. I… – Nassim Nicholas Taleb | Facebook.

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