Why can statistical theory predict catastrophes?
John Kay is a superb writer on complex things. He makes them understandable. By definition, anyone who can do that is a superb writer. Most people, dealing with difficult subjects, make a hash of it, rendering the reader perplexed, angry at her own apparent stupidity, and vowing never again to read about said topic. The column that follows is from The Financial Times; it appeared there earlier this year, but that doesn’t matter: it would have as much applicability five years from now, or even 50. The subject is why it’s so darned difficult to anticipate extreme, catastrophic events, even with the armamentarium of modern day statistics and computer modeling. Read his piece, you’ll understand the subject much better than you did. Full disclosure: I am not an employee of John Kay, nor have I ever received any consideration, financial or otherwise, from him. I have corresponded with him via email, and I did, of my own volition, purchase his latest book, “Everlasting Light Bulbs: How Econom
