• Title: Robustness
  • Author: Thomas J. Sargent
  • ISBN: 9780691114422
  • Page: 417
  • Format: Hardcover
  • Robustness The standard theory of decision making under uncertainty advises the decision maker to form a statistical model linking outcomes to decisions and then to choose the optimal distribution of outcomes Th
    The standard theory of decision making under uncertainty advises the decision maker to form a statistical model linking outcomes to decisions and then to choose the optimal distribution of outcomes This assumes that the decision maker trusts the model completely But what should a decision maker do if the model cannot be trusted Lars Hansen and Thomas Sargent, two leadingThe standard theory of decision making under uncertainty advises the decision maker to form a statistical model linking outcomes to decisions and then to choose the optimal distribution of outcomes This assumes that the decision maker trusts the model completely But what should a decision maker do if the model cannot be trusted Lars Hansen and Thomas Sargent, two leading macroeconomists, push the field forward as they set about answering this question They adapt robust control techniques and apply them to economics By using this theory to let decision makers acknowledge misspecification in economic modeling, the authors develop applications to a variety of problems in dynamic macroeconomics.Technical, rigorous, and self contained, this book will be useful for macroeconomists who seek to improve the robustness of decision making processes.

    One Reply to “Robustness”

    1. A truly remarkable work of fiction: so chock full of proofs and scalar product operations, even knowledgeable readers will be tempted to believe that economics is after all a science. But, alas, it is nearly all bullshit. Interesting contributions are the use of min-max in a valiant attempt to attribute rationality to the irrational behavior of the fabled homo economicus, and work to distinguish between market price of model uncertainty and market price of risk.

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