Is risk management a science?

Paul Davidson

Journal of Post Keynesian Economics, 2012, vol. 35, issue 2, 301-312

Abstract: Risk management computer models developed by the "quants" of Wall Street and used by investment bankers did not predict the financial derivative crisis that almost sunk the global financial community in 2007. This article explains why these complex models were wrong and why models like Taleb's black swan approach are all based on nonapplicable axioms. It then explains how Soros's concept of reflexivity is similar to Keynes's liquidity theory of financial markets—an analytical framework that explains what caused the financial crash of 2007-8.

Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2753/PKE0160-3477350207 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:postke:v:35:y:2012:i:2:p:301-312

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MPKE20

DOI: 10.2753/PKE0160-3477350207

Access Statistics for this article

More articles in Journal of Post Keynesian Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().