FW: Greenspan on forecasting, uncertainty and risk management

[Stephen Guerin]

>From John Strong on the ChaoPsyc list:

Interesting speech by Greenspan bringing in nonlinear conditions and
uncertainty into the musings of the Federal Reserve in the US.  The full
speech titled "Monetary Policy Under Uncertainty" can be found at the
following URL.  I've copied two interesting paragraphs below.

http://www.federalreserve.gov/boarddocs/speeches/2003/20030829/default.htm

"Given this state of flux, it is apparent that a prominent shortcoming of
our structural models is that, for ease in parameter estimation, not only
are economic responses presumed fixed through time, but they are generally
assumed to be linear. An assumption of linearity may be adequate for
estimating average relationships, but few expect that an economy will
respond linearly to every aberration. Although some nonlinearities are
accounted for in our modeling exercises, we cannot be certain that our
simulations provide reasonable approximations of the economy's behavior in
times of large idiosyncratic shocks."

and

"Despite the extensive efforts to capture and quantify these key
macroeconomic relationships, our knowledge about many of the important
linkages is far from complete and in all likelihood will always remain so.
Every model, no matter how detailed or how well designed conceptually and
empirically, is a vastly simplified representation of the world that we
experience with all its intricacies on a day-to-day basis. Consequently,
even with large advances in computational capabilities and greater
comprehension of economic linkages, our knowledge base is barely able to
keep pace with the ever-increasing complexity of our global economy."

[Carl Tollander-2]

Greenspan is a true poet and master of the English language.  Does  
anyone know if the action figure is actually available or is a hoax?

What is actually encouraging is that there are a few senators who seem  
to understand him.

On Saturday, August 30, 2003, at 06:23  PM, Stephen Guerin wrote:

>> From John Strong on the ChaoPsyc list:
>
> Interesting speech by Greenspan bringing in nonlinear conditions and
> uncertainty into the musings of the Federal Reserve in the US.  The  
> full
> speech titled "Monetary Policy Under Uncertainty" can be found at the
> following URL.  I've copied two interesting paragraphs below.
>
> http://www.federalreserve.gov/boarddocs/speeches/2003/20030829/ 
> default.htm
>
> "Given this state of flux, it is apparent that a prominent shortcoming  
> of
> our structural models is that, for ease in parameter estimation, not  
> only
> are economic responses presumed fixed through time, but they are  
> generally
> assumed to be linear. An assumption of linearity may be adequate for
> estimating average relationships, but few expect that an economy will
> respond linearly to every aberration. Although some nonlinearities are
> accounted for in our modeling exercises, we cannot be certain that our
> simulations provide reasonable approximations of the economy's  
> behavior in
> times of large idiosyncratic shocks."
>
> and
>
> "Despite the extensive efforts to capture and quantify these key
> macroeconomic relationships, our knowledge about many of the important
> linkages is far from complete and in all likelihood will always remain  
> so.
> Every model, no matter how detailed or how well designed conceptually  
> and
> empirically, is a vastly simplified representation of the world that we
> experience with all its intricacies on a day-to-day basis.  
> Consequently,
> even with large advances in computational capabilities and greater
> comprehension of economic linkages, our knowledge base is barely able  
> to
> keep pace with the ever-increasing complexity of our global economy."
>
>
> ============================================================
> FRIAM Applied Complexity Group listserv
> Meets Fridays 9AM @ Jane's Cafe
> Lecture schedule, archives, unsubscribe, etc.:
> http://www.redfish.com/friam
>

[Stephen Guerin]

Couldn't find the Greenspan action figure...

But you may be interested in this one:

"This incredibly detailed figure is a fitting addition to the collection of
those interested in U.S. history, military memorabilia and toy action
figures. Actual figure may vary slightly from item shown."
<http://www.kbtoys.com/genProduct.html/PID/2431939/ctid/17/place/%20%20aguc?
_ts=n&ls=collect&_e=3f514&_v=3F51490EIX4Ea8EA160311A7&_ts=y>

____________________________________________________
http://www.redfish.com    [hidden email]
624 Agua Fria Street      office: [phone]
Santa Fe, NM 87501        mobile: [phone]

> -----Original Message-----
> From: [hidden email] [mailto:[hidden email]]On
> Behalf Of Carl Tollander
> Sent: Saturday, August 30, 2003 6:19 PM
> To: The Friday Morning Complexity Coffee Group
> Subject: Re: [FRIAM] FW: Greenspan on forecasting,uncertainty and risk
> management
>
>
> Greenspan is a true poet and master of the English language.  Does
> anyone know if the action figure is actually available or is a hoax?
>
> What is actually encouraging is that there are a few senators who seem
> to understand him.
>
> On Saturday, August 30, 2003, at 06:23  PM, Stephen Guerin wrote:
>
> >> From John Strong on the ChaoPsyc list:
> >
> > Interesting speech by Greenspan bringing in nonlinear conditions and
> > uncertainty into the musings of the Federal Reserve in the US.  The
> > full
> > speech titled "Monetary Policy Under Uncertainty" can be found at the
> > following URL.  I've copied two interesting paragraphs below.
> >
> > http://www.federalreserve.gov/boarddocs/speeches/2003/20030829/
> > default.htm
> >
> > "Given this state of flux, it is apparent that a prominent shortcoming
> > of
> > our structural models is that, for ease in parameter estimation, not
> > only
> > are economic responses presumed fixed through time, but they are
> > generally
> > assumed to be linear. An assumption of linearity may be adequate for
> > estimating average relationships, but few expect that an economy will
> > respond linearly to every aberration. Although some nonlinearities are
> > accounted for in our modeling exercises, we cannot be certain that our
> > simulations provide reasonable approximations of the economy's
> > behavior in
> > times of large idiosyncratic shocks."
> >
> > and
> >
> > "Despite the extensive efforts to capture and quantify these key
> > macroeconomic relationships, our knowledge about many of the important
> > linkages is far from complete and in all likelihood will always remain
> > so.
> > Every model, no matter how detailed or how well designed conceptually
> > and
> > empirically, is a vastly simplified representation of the world that we
> > experience with all its intricacies on a day-to-day basis.
> > Consequently,
> > even with large advances in computational capabilities and greater
> > comprehension of economic linkages, our knowledge base is barely able
> > to
> > keep pace with the ever-increasing complexity of our global economy."
> >
> >
> > ============================================================
> > FRIAM Applied Complexity Group listserv
> > Meets Fridays 9AM @ Jane's Cafe
> > Lecture schedule, archives, unsubscribe, etc.:
> > http://www.redfish.com/friam
> >
>
>
> ============================================================
> FRIAM Applied Complexity Group listserv
> Meets Fridays 9AM @ Jane's Cafe
> Lecture schedule, archives, unsubscribe, etc.:
> http://www.redfish.com/friam
>
>