The inauguration of the Center for Research in Financial Mathematics and Statistics at UC Santa Barbara featured three distiguished speakers addressing issues in financial mathematics and statistics.
Following are main issues in Financial Mathematics on the basis of above video's comments in YouTube :
1. Modeling financial markets
The problem with these subjects are that they all look 'from within the box'. The real world is incredibly complex. Modeling financial markets it is more complex than modeling even the movement of gas (in which even with extreme knowledge of conditions leads to butterfly effects that cannot be predicted). None of the references include guys like Mandelbrot who would claim that these models are not suitable for economics.
2. Mathematical illiteracy
The idiom, "a poor plumber always blames his/her tools", shows how silly to put blame on mathematical analysis not individuals for miscalculations.
To simply relying on models without knowing their constraints is a clear sign of mathematical illiteracy. I doubt the majority of these model users can even prove mathematically to why the models work.
3. Wrong assumptions
Not only. empirically these are simply learning how to be wrong. Their cognitive dissonance support them to grab the models and use them with wrong assumptions and therefore wrong outputs to sustain a wrong perception of the world and reality.
Human being will never change and his tendency to escape in "gnoseocrazia" and its jargon is just an example not of sane humble culture but arrogant fear.
Following are main issues in Financial Mathematics on the basis of above video's comments in YouTube :
1. Modeling financial markets
The problem with these subjects are that they all look 'from within the box'. The real world is incredibly complex. Modeling financial markets it is more complex than modeling even the movement of gas (in which even with extreme knowledge of conditions leads to butterfly effects that cannot be predicted). None of the references include guys like Mandelbrot who would claim that these models are not suitable for economics.
2. Mathematical illiteracy
The idiom, "a poor plumber always blames his/her tools", shows how silly to put blame on mathematical analysis not individuals for miscalculations.
To simply relying on models without knowing their constraints is a clear sign of mathematical illiteracy. I doubt the majority of these model users can even prove mathematically to why the models work.
3. Wrong assumptions
Not only. empirically these are simply learning how to be wrong. Their cognitive dissonance support them to grab the models and use them with wrong assumptions and therefore wrong outputs to sustain a wrong perception of the world and reality.
Human being will never change and his tendency to escape in "gnoseocrazia" and its jargon is just an example not of sane humble culture but arrogant fear.
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