Comments on: The (Mis)Behavior of Markets http://gebweb.net/blogpost/2008/12/06/the-misbehavior-of-markets/ 10 PRINT "GEB", 20 GOTO 10 Tue, 15 May 2012 15:25:12 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tormod http://gebweb.net/blogpost/2008/12/06/the-misbehavior-of-markets/#comment-231 Tormod Sat, 06 Dec 2008 16:52:10 +0000 http://gebweb.net/blogpost/2008/12/06/the-misbehavior-of-markets/#comment-231 A good read! But I do not agree that no map is better than a bad map. Most models used for practical everyday statistics are based on Gaussian assumptions. This does not make the models useless. As long as the assumptions and limitations are known to the user they are of great value since they can actually be used. They produce answers and predictions that can help in understanding the (non-gaussian) world we live in. But, anyone who does not calibrate his or her models to the problem at hand is obviously a fool. I assume a lot of calibration is being done at the moment ;-) Until a better *usable* model is proposed the normal distribution will still be at the core of most curricula. (And who says inflation is bad? Buy a house and then tell me why plummeting interest rates and high inflation are bad ...) A good read! But I do not agree that no map is better than a bad map. Most models used for practical everyday statistics are based on Gaussian assumptions. This does not make the models useless. As long as the assumptions and limitations are known to the user they are of great value since they can actually be used. They produce answers and predictions that can help in understanding the (non-gaussian) world we live in. But, anyone who does not calibrate his or her models to the problem at hand is obviously a fool. I assume a lot of calibration is being done at the moment ;-) Until a better *usable* model is proposed the normal distribution will still be at the core of most curricula.

(And who says inflation is bad? Buy a house and then tell me why plummeting interest rates and high inflation are bad …)

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