tag:blogger.com,1999:blog-4900303239154048192.post5270953878743283017..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: A Beginner’s Guide to Probability Distributions, Risk and PrecautionUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4900303239154048192.post-82905163384872221722014-11-04T10:00:55.617-05:002014-11-04T10:00:55.617-05:00Perhaps you might find this post, about estimating...Perhaps you might find this post, about estimating the probability of tail events, of interest: http://robertvienneau.blogspot.com/2014/04/estimating-probability-of-extreme-events.htmlRobert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-55039486234662114772014-10-29T15:19:53.963-04:002014-10-29T15:19:53.963-04:00I'm not sure if this responds entirely, Bruce,...I'm not sure if this responds entirely, Bruce, but one extension would be to add sequential decision-making to the discussion. Then you could better model learning, the effect of irreversibility, etc. As it is now, there is an expected value calculation at a single point in time, and that's it.<br /><br />As for control, the adaptive management model is explicitly multiperiod.Peter Dormanhttps://www.blogger.com/profile/00093399591393648071noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-41683399669486492772014-10-29T15:16:50.191-04:002014-10-29T15:16:50.191-04:00Let us be clear. Wyile IPCC assumed normal distri...Let us be clear. Wyile IPCC assumed normal distributions for posbbiel global clmate outcomes, there is every reason to believe that they are more likely to be power law distributed, meaning the probability of an extreme tail event, such as a very large increase in global temperature,is much greater. What underlies this are the positive feedback mechanisms operating in the global climate system.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-66813388346903613172014-10-29T15:02:05.815-04:002014-10-29T15:02:05.815-04:00Thank you for that lucid and brief explanation.
A...Thank you for that lucid and brief explanation.<br /><br />A useful extension might be to explore what it means to bring a process under control. Normal distributions find many practical applications, because we deliberately control processes to generate normal distributions of valued outcomes.<br /><br />In the climate change context, we are considering whether it is sufficient to control the amount of carbon in the carbon cycle to adequately control the climate. In that context, we ought to fear not a black swan, but a race condition in which we learn about climate change (or ocean ecology collapse) too slowly to respond.<br /><br />Hopefully this comment makes sense -- for some reason, I suddenly feel as if I may be singing in the shower on this one.Bruce Wilderhttps://www.blogger.com/profile/09631065564839959376noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-36343245881180353962014-10-28T22:12:36.617-04:002014-10-28T22:12:36.617-04:00So, Marty showed that assuming global climate is p...So, Marty showed that assuming global climate is power law rather than normal Gaussian or something else intermediate, that the probability of a truly catastrophic increase in global temp, like 12 degrees C, or something like that, way beyond the upper end of the IPCC published range, which is half that, or something like that (not checking these numbers), would be nearly 1% rather than something like one out of a billion. <br /><br />So, one percent is non-trivial, but try to convince people to experience economic costs for that in the short run while there is still high unemployment and the near term outcome for the US economy is that at least a bit more warming is likely to increase our GDP due to the declines in winter warming costs outweighing all the drought and flood damage (beyond about another degree the latter beat out the former and it goes south).<br /><br />Of course, the true Talebian black swans involve no probability distribution, like true Keynesian-Knightian uncertainty.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.com