walkitout (walkitout) wrote,

Not Just a River in Egypt, also, the Hippo in Flight

Again, from _Econned_, this time 19%/location 1785ish, Paul Cootner is quoted on the subject of Mandelbrot's work:

"If he is right, almost all of our statistical tools are obsolete. ... [that's in the book, not from me] Almost without exception, past econometric work is meaningless. Surely, before consigning centuries of work to the ash pile we should like to have some assurance that all our work is not truly useless. If we have permitted ourselves to be fooled this long into thinking the Gaussian assumption is valid, is it not possible that the revolution is similarly illusory?"

There's more in _Econned_ and presumably more at _The Random Character of Stock Market Prices_, published by MIT Press in 1964. Page 337.

(Judging by what I turn up via google books, what was omitted in _Econned_ is: -- "least squares, spectral analysis, workable maximum-likelihood solutions, all our established sample theory, closed distribution functions.")




It is to laugh.

The hippo is the hypocrisy of a member of a discipline which makes it a point of dogma to discount sunk costs to zero engaging in this particular flight of rhetoric.

Of course Mandelbrot was right; besides, only a moron would have ever accepted the Gaussian assumption in the first place. Did these people pay _any_ attention to actual markets? Like, ever?
Tags: economics, not-a-book-review

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