Discover and read the best of Twitter Threads about #RegressionToTheTail
Most recents (6)
Daily Bookmarks to GAVNet 03/30/2021 greeneracresvaluenetwork.wordpress.com/2021/03/30/dai…
Complex Systems: Volume 30, Number 1 (2021)
complex-systems.com/current/
#complexity #journal #CurrentIssue
complex-systems.com/current/
#complexity #journal #CurrentIssue
The Law of Regression to the Tail: How to Survive COVID-19, the Climate Crisis, and Other Disasters
papers.ssrn.com/sol3/papers.cf…
#RegressionToTheTail #risk #FatTailedRisk #COVID19 #pandemics #ClimateCrisis #RiskMitigation
papers.ssrn.com/sol3/papers.cf…
#RegressionToTheTail #risk #FatTailedRisk #COVID19 #pandemics #ClimateCrisis #RiskMitigation
1/4
Item #3 for building back better
#DIGITIZATION
We are unlikely to return to the same state of the world as when we entered the #pandemic, nor is this desirable. #Remoteworking has the potential to become more prevalent after the crisis.
Item #3 for building back better
#DIGITIZATION
We are unlikely to return to the same state of the world as when we entered the #pandemic, nor is this desirable. #Remoteworking has the potential to become more prevalent after the crisis.
2/4
Investments might shift from face-to-face working (and lower the cost of #officerealestate and time for #commuting).
Investments might shift from face-to-face working (and lower the cost of #officerealestate and time for #commuting).
3/4
#Stimulus spending should focus investments on the enablers of this new approach to work, e.g., #5G rollouts, #broadband infrastructure, #satellites for global reach, server farms for adequate capacity, etc, all with effective #privacy protection.
#Stimulus spending should focus investments on the enablers of this new approach to work, e.g., #5G rollouts, #broadband infrastructure, #satellites for global reach, server farms for adequate capacity, etc, all with effective #privacy protection.
1/4
Item #2 for building back better
DECARBONIZING THE ECONOMY
The covid crisis must be used to accelerate the transition to an electric, zero-carbon economy, to reduce climate tail risk.
Item #2 for building back better
DECARBONIZING THE ECONOMY
The covid crisis must be used to accelerate the transition to an electric, zero-carbon economy, to reduce climate tail risk.
2/4
This includes:
(a) investments in renewable energy (and maybe nuclear, if it can be made fast and safe) for powering the industry;
(b) electrification of trains, trucks, public transport, and cars; and
This includes:
(a) investments in renewable energy (and maybe nuclear, if it can be made fast and safe) for powering the industry;
(b) electrification of trains, trucks, public transport, and cars; and
3/4
(c) investments to improve true sustainability of farming, food manufacture, housing, and commercial real estate.
Free pdf with new paper here: bit.ly/2C69vKS
Please help share.
(c) investments to improve true sustainability of farming, food manufacture, housing, and commercial real estate.
Free pdf with new paper here: bit.ly/2C69vKS
Please help share.
1/4 #Nuclear power plants are bespoke, slow to build, and fat tailed for financial and safety risks. #Wind farms and #energystorage are modular, fast, and thin tailed.
2/4 By choosing wind over nuclear, the risk of regression to the tail will be significantly reduced, and #climate goals will be achieved sooner. This is just one example. Many others exist.
3/4 Every investment alternative must be assessed in this manner to ensure that #stimulus spending becomes a boost instead of a drag on the economy. The latter is happening more often than we like to think.
Free pdf with new paper: bit.ly/2C69vKS
Please help share.
Free pdf with new paper: bit.ly/2C69vKS
Please help share.
1/4 Rebuilding the economy after covid-19 will be subject to the law of regression to the tail, if less dramatically than the pandemic. Loss of life will hopefully fade as a main risk. But financial fragility, wealth destruction, and debt will continue to be key risks for a while
2/4 The massive stimulus spending governments use to restart economies in recession comprise giant construction and investment projects with fat-tailed financial risks, like multi-billion-dollar megaprojects in IT, transport, energy, water, education, housing, health, and defense
3/4 Some projects are more fat-tailed than others, i.e., they are more susceptible to the law of regression to the tail. Data analytics should be used to separate fat-tailed projects from thin-tailed ones, and stick with the latter whenever possible. We know how to do this.
#Floods and #wildfires are both subject to regression to the tail. The same holds for #droughts, #hurricanes, #landslides, #icemelt, #sealevelchange, and other phenomena closely related to the climate crisis.
This tells us that understanding regression to the tail and how to mitigate its specific manifestations for climate will be key to mitigating the climate crisis.
Here it is worth remembering that regression to the tail for the climate crisis will be just as indifferent to human ignorance and folly as regression to the tail is for covid-19.
