Posts

On a cryptocurrency of dynamic supply

  0. Largely a follow-up piece to this , this bit was originally posted on 30.09.2021 and will probably be kept on a schedule of continued updates, if only to keep this as the top-most post in here. Skip to section 2 if you don't care 'bout no into. 1 Setting the stage 1.1 The economy under the division of labour is a massive and massively complex system with immense degrees of freedom. Commie silliness notwithstanding, only money, an emergent computer of comparable capability, is equal to the task of daily optimising resources such as to fulfill demand to the greatest degree possible. Money alone can run such calculations at any reasonable speed. 1.2 Calculations need to be run in the moment as well as in time, hence the true and core function of money as a unit of account. Medium of exchange kind of follows but may be in principle separated, while store of value can be entirely separated at no cost to anyone. 1.3 It is extremely hard not to mess monetary calculations in

On a credible alternative to liberal democracy

 0.1 The novel idea of this post, the Tryptic Model of elections, is not mine at all , but was taken wholesale from another author I can’t for the life of me neither remember nor track back. As soon as I’m able I’ll update the post to credit him, but for now just note that I’m just running with an idea proposed by someone else. Of course, all errors or implications readers may choose to draw remain mine alone as, from what I can remember, the author read like a left-of-center guy who would find the right-leaning nature of this post quite distasteful, I dare think. 0.2 That being said, this is another issue-solution coupling I’m quite interested in and hence this post will be kept on a continued feed of updates such as to pin it to the top of the blog. Original post published on November 22 nd 2022.   1 The High-Level Solution 1.1 I agree with those who see liberal democracy as a system with a built-in leftist bias, that takes a few generations to destroy once functional societ

On better measuring gains in standard of living

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 1.1 I was inspired to think of this when reading this post (h/t Astral Codex Ten ). All of the relevant critique of the post itself can be found in the comments, but it helped me realize there is something off with real GDP as a measure of standard of life. I will take the opposite view of Less Wrong though, and state that real GDP accounting overestimates gains in standard of life. 1.2 Let take a simple economy that only produces and consumes widgets. I am not interested in nominal – real distinctions here, so I need not assume any more than one product class, and will stick to inflation not being a thing in this post. 1.3 In 2021, total production and consumption is of 100 widgets, sold for $1 each. In 2021, technology gains allow a massive increase of production to 200 widgets, selling for $ 0.5 each. Nominal spending stays the same but, by the standards of current GDP accounting as I understand them, real GDP seems to have doubled in this example. Has it though? 1.4 Obviously

On removing abnormal claims from reserving triangles

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 1.1 In a previous post I discussed a general method for removing outliers from a dataset given that one has a model. Let try now to apply this to non-life claims reserving by triangles. 1.2 The cumulated triangle below includes one obvious outlier incurred in 2018, and emerging one year after. 1.3 Having a model of the data arranged in triangle form means breaking down the triangle into a vertical (exposure) and horizontal (pattern) component. These two are dependent on the choice of reserving method, with the additive method being an obvious example of splitting the triangle into two dimensions. 1.4 Let’s work with basic chain ladder instead. Now we could use year 0 claims as a measure of exposure and the cumulated development factors as a pattern, but this would mean that we always “take for granted” that year zero data. 1.5 A better approach is to use the ultimate development as exposure. You can go about calculating the ultimate by the usual longish fashion, or you can use

On removing outliers

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 1.1 Another technique which would be rather obvious, just writing about it as I don’t remember encountering it. The application to claims reserving could be a bit more original, that’s coming in a next post. 1.2 So, a technique that would help to smooth out any outliers in your dataset (as long as you have a model of the underlying pattern, which if you don’t, how do you know that you even have outliers?) is to iteratively replace the datum that diverges by most (absolute value or percentage, depending on context) by the expected datum by the latter. Recalculate the model parameters given the new data, and repeat until there are no more outliers form the model at all (arbitrary small differences).  There, you have model parameters that are robust against outliers. 1.3 Alternatively, you can replace the offending datum by a weighted sum of the datum and its expected value, which will allow the smoothing process to take a bit longer. 1.4 In all cases, you are not ignoring outlier

On enforcing fiscal responsibility through fully-amortized loans

  1. Problem: balloon loans 1.1 As far as I know, all borrowing taken out by governments the world over is repaid in bullet / balloon format, where the principal is fully repaid in one single payment at the end of the loan term, and only interest is payable up until that time. Some of those loans run for 50 years, just so we are clear. 1.2 at the other end of the repayment schedule spectrum, you find a fully amortized loan, whereby the borrower repays both the principal and interest on it in a series of equal repayments throughout the term of the loan (ask Excel). The issue and solution should now both be obvious. 1.3 Borrowing in the form of balloon loans creates almost all of the issues with public financing we all know and love. For one, it creates an incentive to borrow at the shorter term possible, as most of the time curves are such as to require higher interest for longer duration. But interest is the only thing actually repaid with balloon loans, as they are universally t

On Iterated Bucklin voting

  0. The full presentation of this count can be found here , I’ll reproduce a shorter and less technical version  only (also, limited to the single winner case) in this post. 1 Getting to Iterated Bucklin 1.1 Iterated Bucklin derives from Bucklin (merged with Instant Run-off Voting ), and Bucklin voting itself can be though of as a derivation of Approval Voting (not how Bucklin actually was derived AFAIK). Approval can in turn be thought of as deriving from plurality / majority / pick-one / first-pass-the-post voting. So Plurality -> Approval -> Bucklin -> Iterated Bucklin. 1.2 Approval voting improves on plurality in that you can vote for as many candidates as you wish (but you can’t give more than one vote to any one candidate), making the selection of compromise candidate that should be closest to the median voter much easier, and eliminating well-known issues of plurality in the form of spoiler effects etc. Approval is an obvious improvement over plurality voting,