My blog, Econocasts, covers structural equation modeling for objective financial forecasts. I like to remember The Modelers' Hippocratic Oath: I will remember that I didn't make the world, and it doesn't satisfy my equations. Though I ...more

My blog, Econocasts, covers structural equation modeling for objective financial forecasts. I like to remember The Modelers' Hippocratic Oath: I will remember that I didn't make the world, and it doesn't satisfy my equations. Though I will use models boldly to estimate value, I will not be overly impressed by mathematics. I will never sacrifice reality for elegance without explaining why I have done so. Nor will I give the people who use my model false comfort about its accuracy. Instead, I will make explicit its assumptions and oversights. Signed - Paolo This oath is attributed to Emanuel Derman and Paul Wilmott. Notice I have left out the last paragraph of the original oath. I think it reaches a bit too far. Here it is: I understand that my work may have enormous effects on society and the economy, many of them beyond my comprehension.less