Sunday, March 4, 2007

The Ultimate Demographic Study

So, just how many people HAVE walked the earth? How many humans? Ever?

At least 20 years ago, I first heard the opinion expressed that there are as many, or more, people ALIVE now than who have ever lived and died. That always sounded incomprehensible to me on its surface -- but what ARE the relevant numbers? This article reports on a demographer who has tried to quantify this.

- Rick

Saturday, March 3, 2007

Risk Man

Today's WSJ has an interview with Myron Scholes (available free here). Scholes is especially known for the Black-Scholes option pricing model, winning the Nobel Prize (received along with Robert Merton), and being a co-founder of Long Term Capital Management, which failed in 1998, shortly after the award of the Nobel. (In the interview, he is very honest and philosophical about the LTCM situation.)

This is a very nice piece, well worth reading. There are at least three specific comments that I found particularly interesting:

(1) The writer of the piece refers to Scholes as a "life-long student of risk." A wonderful title, and a great goal for many of us -- I like to tell my students that they should strive to become "students of the insurance industry and the actuarial profession." "Student of risk" is perhaps an even better goal and title.

(2) Scholes characterizes the financial system as moving between greater and lesser stability (or less and more risk taking). When the system becomes stable and quiet, people tend to begin taking more risks, lessening the stability. Lower stability leads to greater cautiousness and more stability, etc.

(3) When asked whether the LTCM collapse put the entire financial system in danger, Scholes admits he doesn't know. I would have thought such a view, which has occasionally been expressed, to be largely hyperbole. Interesting...

- Rick

Workers Compensation in New York

The state of New York recently announced a coming overhaul of the its workers compensation system. A NYT article can be found here.

NY is an interesting WC state -- costly, but at the same time relatively low on the benefits-to-workers scale (in comparison with other states). Naturally, that's a combination that wouldn't seem, on its surface, to be amenable to easy repair. Hopefully, this new approach can succeed.

There is also a short editorial in today's WSJ, looking at this announcement as a positive.

- Rick