Keynesian uncertainty and the shaky foundations of statistical risk assessment models

Alessandro Roncaglia

PSL Quarterly Review, 2012, vol. 65, issue 263, 437-454

Abstract: With the financialization of the economy, increasing reliance has been put on statistical models for derivatives pricing and for risk assessment in the day-to-day business of financial operators as well as in financial regulation. This practice had already been criticized from many quarters and on different accounts before the crisis, but these criticisms were simply ignored by the prevailing consensus. This work reconsiders such criticisms from a different standpoint: though they are justified, they could have been put forward in even stronger terms had they relied on Keyness work on probability and his notion of uncertainty. I shall thus focus on the conceptual views underlying statistical risk assessment techniques rather than on the techniques in themselves. Finally, I set out some policy implications for regulation.

Keywords: risk assessment; probability; uncertainty; financial regulation (search for similar items in EconPapers)
JEL-codes: D81 E12 G32 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10197/10086 (application/pdf)

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:psl:pslqrr:2012:45

Ordering information: This journal article can be ordered from
http://www.pslquarterlyreview.info

Access Statistics for this article

PSL Quarterly Review is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti

More articles in PSL Quarterly Review from Economia civile
Bibliographic data for series maintained by Carlo D'Ippoliti ().