Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers
Nassim Nicholas Taleb
New York University-Poly School of Engineering
October 18, 2009
The point of The Black Swan is that both empirical knowledge (i.e. extrapolating statistics) and a priori theories fail in the tails and it is vital to "robustify" against it using the concepts of "the fourth quadrant". The point has been garbled by members of the economics establishment that claim mistakenly "we know that" and "we know about fat tails" or "power laws". This is both wrong and not my point. The paper presents corrections to the misperceptions.
Number of Pages in PDF File: 7
Keywords: Black Swan, Risk Management, Finance, Markets
JEL Classification: D8, G11, G12, G13, Nworking papers series
Date posted: October 21, 2009
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