Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers

Posted: 21 Oct 2009  

Nassim Nicholas Taleb

NYU-Tandon School of Engineering

Date Written: October 18, 2009

Abstract

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.

Keywords: Black Swan, Risk Management, Finance, Markets

JEL Classification: D8, G11, G12, G13, N

Suggested Citation

Taleb, Nassim Nicholas, Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers (October 18, 2009). Available at SSRN: https://ssrn.com/abstract=1490769 or http://dx.doi.org/10.2139/ssrn.1490769

Nassim Nicholas Taleb (Contact Author)

NYU-Tandon School of Engineering ( email )

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