They should also avoid becoming “slaves to some defunct economist” toīorrow Keynes’s phraseology. Sadly, as Howard Marks has observed, common sense is not soĪll practitioners should be required to take a financial version of the Hippocratic Oath, with anĮmphasis on doing no harm. More common sense and a little less complex mathematics would go a long way toward making the Ultimately, academics should interact more with practitioners in order toĮnsure their models aren’t missing the most important elements of the problem at hand. Much headway around liquidity, leverage, bad behaviour, bad incentives, and delegated management has been made over the last few years by those willing to incorporate many of theĮlements discussed above. Those involved in the theory of finance should heed the Modeler’s Oath presented earlier, and stop sacrificing reality on the altar of elegance.
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