American Economic Review Vol. 91 No. 2 2001
Pitfalls of a Minimax Approach to Model Uncertainty
Abstract
(i) It does not always keep the normative analysis of decision-making distinct from its descriptive analysis, losing sight of the fact that these methods are appealing shortcut approximations, not improvements on, decision-making based on the Savage axioms. (ii) In all the existing applications to monetary policy it analyzes uncertainty about relatively unimportant aspects of models, while making strong, but actually uncertain, assumptions about other, more important aspects.
- DOI
- 10.1257/aer.91.2.51
- Volume
- 91
- Issue
- 2
- Pages
- 51-54
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref