tag:blogger.com,1999:blog-1740670447258719504.post3382967777876712147..comments2024-03-18T06:41:03.841-04:00Comments on Facts & other stubborn things: Noah Smith on business "cycles"Evanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1740670447258719504.post-23069674705413603952013-02-15T08:33:16.615-05:002013-02-15T08:33:16.615-05:00I think that Milton Friedman himself said somethin...I think that Milton Friedman himself said something along the lines of: "I believe that the term business cycle is incorrect...a more appropriate term would be 'economic fluctuations'."<br /><br />Or something to that tune.<br /><br />In any case Daniel Kuehn, have you ever looked into non-parametric statistics? Benoit Mandelbrot has proven that when it comes to financial markets, the values of prices over a fifty-year time period simply DO NOT resemble the log-normal distribution. In fact, the Cauchy distribution fits the data much better.<br /><br />But as for long term investment in the so-called "real sector", which is still subject to a lot of uncertainty/ambiguity, non-parametric approaches are apparently the way to go. In fact, if I'm not wrong, there have been some attempts to incorporate non-parametric approaches in econometrics...how well did the people who imported the techniques understand them, or how accurate and reliable they are when compared to non-parametric studies done by actual statisticians, I don't know, but here are some links for reference.<br /><br />http://link.springer.com/article/10.1007%2Fs00181-012-0615-z<br /><br />http://onlinelibrary.wiley.com/doi/10.1002/jae.1205/abstract<br /><br />http://www.sciencedirect.com/science/article/pii/S030440760800016X<br /><br />http://www.sciencedirect.com/science/article/pii/S1366554509001380<br /><br />Blue Auroranoreply@blogger.com